Vice-Chairman C. E. Greenwood called the meeting to order at 3 o'clock P.M.

THE CHAIRMAN: The next report will be that of the Electric Range Division, of which Mr. C. O. Dunten is Chairman.

Scope of Report

Practically all phases of the electric range business have been covered by reports of previous range committees in a very thorough and able manner. These previous reports, while not reflecting the actual conditions now existing and which probably will continue to exist during the greater part of 1921, still are fundamentally correct, and can be used as a general guide by central stations which are considering entering the electric range field.

The growth of the electric range load in this country during the last four years has been quite rapid but not as rapid as the lucrativeness of the business warranted. The society for Electric Development is sponsor for the information that 3,600 communities had a cooking rate in effect, in 1917, 5,000 in 1920 and 6,000 in 1921 out of a total of 13,733 communities having electric service available. While the reasons for the apathy on the part of this large proportion of central stations toward this very lucrative source of revenue could not be definitely determined, it was apparently due to a lack of knowledge of the true facts.

The report of the Division, therefore, has been devoted mainly to collecting and collating authentic information as to new investment required, increases in operating expenses, income and other data from the Central Stations already engaged in this business, and presenting same in such a simple manner that it will be possible for any Central Station which is still undecided as to the desirability of this load, to determine by a simple computation whether or not it is a desirable load under its own local conditions.

Some general suggestions as to the latest practice of merchandising electric ranges is also given which may be of benefit to the central station in beginning this work.

Considerable space is also devoted to the heavy duty loads such as commercial electric bake ovens, and hotel and restaurant equipment. This field is especially attractive to the central stations and has not received the attention in the past that its importance deserves.

The above is a brief outline of the work performed by the Division and covers those portions of the subject which in our opinion are of the greatest benefit to the electric range industry as a whole.

SECTION I

Method of Determining the Desirability of the Electric Range Load to the Central Station

The proportionately small number of central stations who are actively and aggressively pushing the sale of electric ranges can only be accounted for by the fact that many of them have erroneous ideas of the business as a whole. When electric ranges were first introduced it was considered necessary by many distribution engineers to install a separate transformer of at thus taking no cognizance of the diversity factor least equal capacity for each range installed, of the load. Large investments were also made for repairing or rebuilding the existing distribution systems which cost was charged direct to the cost of serving the electric range. Such charges were often entirely unnecessary and caused erroneous ideas as to the investment required to serve each range customer. During the last few years of high interest charges and the consequent inability of all Public Utility Companies to make new investments, central stations have been very loath to go after this business through a lack of knowledge of the fundamental facts.

The formula below takes into account all items entering into the investment in distribution systems and plant capacity, cost of energy and revenue which are properly chargeable to an electric range installation. By inserting the figures in this formula which are correct for any particular local conditions, it is possible for any Central Station to determine quickly and positively whether or not the electric range load is desirable.

Explanatory Notes Relative to Formula

The plant and distribution system is already in existence to serve the lighting load.

With an average yearly revenue of $18.00 for residence lighting, represented by 180 kilowatt hours at a 10 cent rate and with a net profit of 10% after deducting all expenses, would mean a yearly profit of $1.80.

All interest, depreciation and tax charges for the equipment are today being borne by the revenue from the lighting load.

Refer to Paragraph A in formula. Actual fuel costs should be used and not switchboard costs. Switchboard costs include a portion of the gen

erating station overhead which is today being absorbed by the revenue from the lighting load. Fuel charges vary from .005 to 0151 per kilowatt hour. A fair average would be .01 per kilowatt hour for medium-sized plant.

Refer to paragraph "B" in formula. This charge is for installing the necessary transformer and stringing the copper to serve the electric range. This permits salvaging of the present lighting transformer and in some cases the lighting drops. The diversity factor of the load is

taken care of in the calculations under Item D. Refer to paragraph "C" in formula. The yearly cost of repairs and maintenance is to cover charges incident. to repairing units, switches, etc., not covered by manufacturer's guarantee. The only figures available are those of Salt Lake which average $4.50 per range per year, and Spokane averaging $3.85 per range per year. This cost is properly chargeable to the customer and the majority of central stations do not bear this expense.

Refer to paragraph "D" in formula. A full realization of the splendid diversity factor entering into the electric range load is necessary in order to properly figure the costs under this heading. The diversity factor figure accepted by the National Electric Light Association is ten to one, which means that one K.W. of generating capacity will serve ten K.W. connected range load. Therefore, a 6000 watt range will have a demand of 600 watts upon the generating capacity of the station. The diversity factor will

vary with the density of the load. This may be made more favorable by installing a large transformer to serve a group of ranges.

Every Central Station has capacity for its lighting peak. As the range load is "off peak” it will seldom be necessary to increase generating capacity and then only when the range load exceeds the excess capacity during off peak hours.

The cost per K.W. of generating station capacity varies from $90.00 to $125.00 per K.W. except in the case of hydro electric plants where this cost varies from $175.00 to $225.00.

Refer to paragraph "E" in formula. In figuring the cost of rearranging the primary distribution, it should be borne in mind that it is only necessary to string copper and install insulators. The poles and cross arms are already in existence. In deciding upon the size of the wire, as well as the distance of the primary rearrangement, the diversity factor of ten to one should be used, taking into consideration that copper for one ampere will serve ten amperes of connected range load. The size of the primary distribution wire would necessarily be governed by and density of load. the voltage of the system, the distance covered

The foregoing formula was sent to four subcommittees of the Electric Range Division with instructions to insert the figures which represented the actual conditions in their locality. The table herewith is an application of the formula,

the figures being representative of the present conditions in the United States.

Interest charges, or in other words, the rate of return on the capital investment as represented by the various classes of security issues w." of couir e, be met from net income pro

In the above cue the return rejte ents n average of 129% on the investment involved. The foregott g ca' n'at on and method of study lows the rage Lueness to be very prontable .* a reasonable rate It should be noted, hower, that many executives and engineers believe at this business is profitable at a rite which ws a theoretical less since it is added to the 1 ting bu mess and t'e tot 1 net profit to the Central SLOVIN KI ter than when this Fu ress is neglected

The dwing extr s from reports of the Central West ar 1 the New England si'condit

and removat g mieters

Repors to services

Expers to coË SULMETS སྤེར་ བུ་རིན་སྒོ་ལ

means by which

in yearly revenue can be

Falso temos to P fritte w! Je system by la in the day lal and to

genstomers. The

we the load factor ing up the valleys

e evert improves

the power futor in the alternatig current d

erating station overhead which is today being absorbed by the revenue from the lighting load. Fuel charges vary from .005 to 0151 per kilowatt hour. A fair average would be .01 per kilowatt hour for medium-sized plant.

Refer to paragraph "B" in formula. This charge is for installing the necessary transformer and stringing the copper to serve the electric range. This permits salvaging of the present lighting transformer and in some cases the lighting drops. The diversity factor of the load is taken care of in the calculations under Item D. Refer to paragraph "C" in formula. The yearly cost of repairs and maintenance is to cover charges incident to repairing to repairing units, switches, etc., not covered by manufacturer's guarantee. The only figures available are those of Salt Lake which average $4.50 per range per year, and Spokane averaging $3.85 per range per year. This cost is properly chargeable to the customer and the majority of central stations do not bear this expense.

Refer to paragraph "D" in formula. A full realization of the splendid diversity factor entering into the electric range load is necessary in order to properly figure the costs under this heading. The diversity factor figure accepted by the National Electric Light Association is ten to one, which means that one K.W. of generating capacity will serve ten K.W. connected range load. Therefore, a 6000 watt range will have a demand of 600 watts upon the generating capacity of the station. The diversity factor will

vary with the density of the load. This may be made more favorable by installing a large transformer to serve a group of ranges.

Every Central Station has capacity for its lighting peak. As the range load is "off peak” it will seldom be necessary to increase generat ing capacity and then only when the range load exceeds the excess capacity during off peak hours.

The cost per K.W. of generating station capacity varies from $90.00 to $125.00 per K.W. except in the case of hydro electric plants where this cost varies from $175.00 to $225.00.

Refer to paragraph "E" in formula. In figuring the cost of rearranging the primary distribution, it should be borne in mind that it is only The poles and cross arms are already in existnecessary to string copper and install insulators. ence. In deciding upon the size of the wire, as well as the distance of the primary rearrangement, the diversity factor of ten to one should be used, taking into consideration that copper for one ampere will serve ten amperes of connected range load. The size of the primary distribution wire would necessarily be governed by the voltage of the system, the distance covered and density of load.

The foregoing formula was sent to four subcommittees of the Electric Range Division with instructions to insert the figures which represented the actual conditions in their locality. The table herewith is an application of the formula,

Profits & Revenue

-c per KWH

the figures being representative of the present conditions in the United States.

Interest charges, or in other words, the rate of return on the capital investment as represented by the various classes of security issues -will, of course, be met from net income produced. In the above case the return represents an average of 12.9% on the investment involved.

The foregoing calculation and method of study shows the range business to be very profitable at a reasonable rate. It should be noted, however, that many executives and engineers believe that this business is profitable at a rate which shows a theoretical loss since it is added to the lighting business, and the total net profit to the Central Station is greater than when this business is neglected.

The following extracts from reports of the Central West and the New England subcommittees are interesting.

Central West

The figures used in this section and those used in the final reports, while they will be of considerable value, we believe the form should have explanatory notes on each item in order that any Central Station Manager may apply his own cost figures and ascertain the profit and necessary rate under local conditions. In this should be explained the reason for using full costs only. It should be explained that Section "C" covers the average cost per residence customer of the following.

Setting and removing meters.
Repairs to services.

Repairs to consumers' meters.

Inspection of consumers' premises.
Customers' installations.

Salaries and expenses-meter indexers.
Salaries and expenses-Accounting Dept.
Salaries and expenses-Collection Dept.
Commercial office rent.

Commercial office supplies and expenses.
Promotion of business lighting.

General and miscellaneous expense chargeable to residence consumers.

The Central Station with generating capacity to sell and extensive distribution system serving a residence lighting load cannot find a more profitable means of increasing its net revenues than The diversity facby securing the cooking load. tor which is now considered ten to one can be increased to twenty to one or even better if the range diversity is increased. The range load when once secured remains a revenue getter for all time, and is constant twelve months of the year in good times or bad and in this respect shows a decided advantage over most power loads.

Even when new generating capacity is required and extensive changes in distribution system must be made, the range will show a much better net revenue per year than any other appliance and furnishes the only means by which a considerable increase in yearly revenue can be secured from residence lighting customers. The range load also tends to improve the load factor for the whole system by building up the valleys in the day load and to some extent improves the power factor in the alternating current districts.