Note 231 — Chapter XXIV · PUBLIC UTILITIES AND PUBLIC OWNERSHIP

The cost of any public service is made up largely of two items, overhead charges and running expenses. In the case of electric light the overhead charges include interest on the capital invested in power houses, machinery, wires and poles, conduits; also such things as insurance, taxes, and rentals, which go on whether the plant produces much or little. Running expenses include the cost of labor, coal, supplies, etc., and these things, of course, vary with the amount of business done. Overhead charges often make up half the cost of producing electric current; so if you double the overhead, the price to the consumer would go up, not down.