166 THE THREE-CHARGE RATE 



This threefold division has also been frequently used by 

 writers in the last years.* 



Classified in this way, the consumer charges vary with the 

 frequency of filling rather than with the quantities taken. 

 They cover such expenses as the care and reading of meters, 

 billing, postage, collections, etc. The second, or demand charges, 

 vary with the size of installation or capacity for taking water, 

 while the third, or output charges, are the only ones that vary 

 with the actual quantities of water drawn. 



This threefold classification was probably first used in 

 connection with the supply of electric current. It may be 

 accepted as a logical division of the expense of supplying water, 

 but some of the conditions of the water service are different 

 from those of electric services, and as a practical matter the rates 

 may not work out in quite the same way. 



With an electrical equipment there is absolutely no storage 

 of power. The electricity must be generated and carried and 

 distributed second for second to meet the requirements of the 

 consumers, and the absolute peak loads must be met by every 

 part of the equipment. Peak loads in the electrical business are 

 high with reference to the main output, and also irregular, in 

 that they come at different times and are frequently of short 

 duration. The cost of furnishing and keeping the equipment 

 ready for service to meet these peaks is a very important part 

 of the whole cost of the electric service. 



With a water-works system, on the other hand, and especially 

 when domestic consumers only are considered, the peak loads 

 are much less marked in amount and they occur with a consider- 

 able degree of regularity each day. In a great many, probably 

 in a majority of water-works systems, there is a standpipe or 

 service reservoir connected with the distribution system, and this 

 meets or helps to meet and carry these peak loads. 



The amount of storage required to cover all such peak loads 

 growing out of variations in domestic water supply service is 

 relatively small; and the cost of furnishing it is hardly an ap- 

 preciable element in the whole cost of supplying water. For 



* Philander Betts, Jour. N.E.W.W. Assn., Vol. XXX, p. 376, 1916. 



