THE UNDERGROUND INSTALLATION OF UTILITIES 363 



We have witnessed the Woodside controversy in California and 

 the Bodega Bay controversy. The question is how do we solve this. 

 The great role that regulation can play is in acceleration. We un- 

 derstand that utilities must make a fair return, no question about that. 

 But my view on rate reduction is that while it is not the function 

 of the ratepayer to supply capital to the utility, study should be 

 made of the most beneficial manner in which cost savings may be 

 translated into permanent benefits for consumers. This may require 

 an examination of the traditional manner in which rate reductions 

 have been treated. Is it better to translate the rate reductions into 

 something of permanence such as an aesthetically pleasing under- 

 ground line? I will make the decision as a regulator that the pub- 

 lic in my State is ready for the exploration of such notions as to rate 

 reductions. 



We had some recent substantial reductions of $24 million in our 

 electric utilities, and these went to rate reduction. It would have 

 been better if they had gone by way of beauty or permanent assets. 

 It enhances the neighborhood and improves it, and tax assessors take 

 recognition of the fact that undergrounding is aesthetic, beautiful, and 

 gives value to property. 



In California, because of the great growth of our State, we are 

 able to have rate reductions, and we hope that this shall continue. 

 For those areas which do not have that spectacular growth, where 

 the utilities are perhaps locked in, I have proposed in the formal 

 paper I have delivered here,* but which I am not reciting now, 

 that possibly the Federal Government, through some tax subsidy or 

 benefit or program, could supply the necessary capital to do this. 

 We have to measure our values in our society. We puncture the 

 earth to bring out oil and gas, and we have a depletion allowance 

 which furnishes incentive. I don't think there is a great deal of 

 difference in terms of social values, if we gave some kind of a subsidy 

 for puncturing the earth to put a utility facility underground. We 

 have an overabundance of oil in this country. If we mean what 

 we say in this conference and are determined to meet the problem 

 of costs, this would be a way of doing it. You should bear in mind 

 in California a jury recently awarded severance damages by virtue 

 of the placing of an overhead line and the severance damages were 

 awarded in a substantial sum and made the construction of under- 

 ground just about as cheap, so to speak, as overhead. 



*Mr. Bennett's formal statement is printed later in this chapter. 

 779-59565 24 



