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Electricity - Interconnections

( Originally Published Early 1900's )

MY FRIENDS have a habit of expecting me to see and express the humorous side, if there is a humorous side, of any subject that may be assigned to me to talk about. I have not been able to discover a humorous side to interconnections. I don't propose to pull any puns or make any improper allusions, but the subject is a real serious one and it seems to me almost entirely lacking in humor.

It is from my point of view, an engineer who is a manager by force of circumstances rather than by choice, very largely a matter of financial considerations and policy rather than of technique, and . yet, there are so many of the technical phases of it that must be considered from the financial standpoint that I will have to touch on them also.

"Interconnection" Defined

To begin with I wish to define interconnections as something different from transmission. Transmission of electrical energy at voltage suitable to distance, amount of energy to be transmitted and so on, is an art which you might say has acquired, obtained and developed a technique.

Interconnection has not yet developed that technique.

The difference between the two is best explained by reference to cases illustrative of the two extremes.

Transmission of energy from a distant water power to an area in which that energy is to be distributed and used is probably the most clear cut case of transmission. It was in that way that trans-mission, as we call it now, began. The early experiments in California and the almost contemporaneous experiments in Europe with high voltage, alternating current, polyphase transmission, all had that basis and their purpose was to develop a method of making useful in the centers of population and industry the energy which could be developed from falling water. Reduced to the simplest element you have a power plant at the distant water power. You have a transmission line of which the physical characteristics include the selection of voltage adapted to the predetermined condition of the amount of energy to be transmitted, the distance and the permissible—commercially permissible—loss in transit. Practically no line of that character reaches the place where the question of loss in transit is interlocked with the question of stability of operation. That is to say, the commercial condition that limits the loss makes the line stable. The unstable line is the line that develops itself in a long expansion or interconnection of existing systems under conditions where the energy has to be passed to a distance not originally contemplated. Now, transmission in series—transmission by stages, is not interconnection, although it approximates very closely to it.

Will you consider such a thing as has happened more than once in our neighboring states where a call for energy in excess of the immediately available generating capacity—such a call being an emergency call and resulting from trouble—occurs in, let us say, Cleveland, Akron, and Canton, Ohio—any of the towns lying between a point well east of Pittsburgh and a point which is now well west of Chicago; the energy required for the time being in, let us say, Cleveland, as an illustration, not because Cleveland is particularly given to calling upon the other interconnected systems for energy but because it happens to be quite a convenient illustration to those of us who are here and who are thinking of it without the aid of maps. That energy may come from any of a number of power plants. As things stand for the last eight weeks or so, it may come from Chicago although that is a condition which is not yet well established. It is much more likely to come from the Philo plant in Middle Ohio or by a succession of shifts from plants on the Alleghany River beyond Pittsburgh. The shifting, however, of that energy from the point which has surplus generating capacity for the time being to the point which is without adequate generating capacity, is not a straight transmission from generating point to receiving point. It is a changing in the proportionment of the load between the interconnected transmission systems. The one which has excess capacity proceeds to deliver more power to its neighbor and that neighbor passes over the equivalent amount of power to the next neighbor and so on until the actual delivery is in the receiving point which, for convenience, we will consider to be Cleveland. You still have a problem in transmission unless you have developed that state of affairs into what is the next step—interconnection. And there might be even more illustrative cases than those I have spoken of.

Series transmission is a case that has happened more than once in California where current generated probably on the Feather River is shoved over into the San Francisco district and the San Francisco district spares current for the San Joaquin and so forth until it is not at all impossible, under existing conditions, that it ultimately may make the delivery of current on the Mexican border; again a succession of shiftings of energy from one point to another through series transmissions, the final adjustment of the whole thing being a problem in the clearing up of accounts exactly such as would occur if each bank that received a check in transit from, say, Arizona to New England, had a settlement with the bank it received it from and if the check did not, as it usually does, take the long jump to some good clearing house town like New York. Now, interconnection differs in just this manner. For my purpose—for the purpose of my talk tonight, it differs. What is contemplated by that term is the interchange of electrical energy between self-sufficient and self-contained electric systems. It is not delivery of energy generated by one property to a receiving property. It is the actual making of such arrangement, physical and commercial, as will allow two or more complete systems, each of them self-sufficient--each of them having its own generating system, its own plant and its own customers—to interchange energy when and as it may be convenient for them to do so. Such a case might occur and is quite likely to occur if the Toledo zone system at Toledo, which has its own complete plant and which, by the way, is interconnected southward into the American Gas and Electric system further down in Ohio, should be connected with The Detroit Edison Company, The Detroit Edison Company should be connected with the Consumer's Power Company, and the Consumer's Power Company should be connected southward into Ohio spanning the very short remaining distance and pick up the American Gas and Electric Company lines and the American Gas and Electric Company again swings around to Toledo. Now again I am speaking as a matter of illustration and I ask that you will not make any implication that that is something these companies are doing. It is one of the very evident possibilities to be brought about when circumstances make it worth while and the circumstances are likely to be commercial rather than technical. In that case it is quite evident that there might be interchanges between any of the four large systems. Interchange might be in any direction around the circle that I have indicated or by short cuts from, say Jackson to Toledo. They might be across the interior of the circle. They might be one season in one direction; as for instance, during times of flood on the Michigan rivers when there is an excess of power in those rivers, more than can be used locally, that energy might be sent to the neighbor who could use it. There might be other times when such troubles as railroad car shortage—shortage of coal—the coal supply might make it possible to send energy up from south of Toledo. There have been times in the past when the Toledo gateway for our coal has been so badly congested that almost any kind of transmission line would have been welcome. We needed the coal to generate energy, not by the cheapest transmission, which is by coal in 50-ton railroad cars, but in the only form of transmission which, in those circumstances, would have been any help to us, namely, electrical energy over wires. There may be any number of conceivable cases. There might be cases of overloading and underloading and there might be cases of shortage of capacity and power house trouble and so on. You can imagine all of these and they all have to be considered. Naturally, the possibilities of usefulness one way or another can be given relative values and from the commercial point of view the position in a scale of relative values of each possibility is an exceedingly interesting study. It is one of the first things that I propose to present to you this evening.

The Importance of Mutual Assistance

Now, the possibilities, as I see them, place themselves somewhat in this order: First of all, mutual assistance. Being brought up in the school in which I was brought up and in which many of you have been brought up, the school that considered an interruption of service as almost in the nature of a crime, you will realize that anything that has a character of reserve capacity has a great attraction and is highly valued by myself and by those of you who, like myself, were brought up in that school.

I believe that of all the possibilities of interconnection as distinguished from transmissions, the possibilities of interconnection between neighboring systems, each self-contained and self-sufficient, that of mutual assistance, when assistance is necessary, is commercially the most important. It has the greatest value to our public and thereby it has the greatest value to us. That, alone, will, in my opinion, justify the making of more interconnections than any other one cause and there being, usually in such cases, numerous reasons why interconnections are necessary or desirable, it will be in more cases than any other factor, the determining cause for the making of the interconnection. If such an interconnection as I have outlined in this area should be completed, I can say definitely because of my knowledge of the minds of the parties interested or to be interested therein, that the possibility of mutual assistance would be to them the predominating reason for the incurring of the expense of the interlinking lines. The ability to call on the resources of three other companies in addition to one's own, is a most, attractive possibility to the man who is ultimately responsible for continuity of service. The knowledge that there will be no time in which one or another of them cannot help him with from 10,000 to 40,000 kilowatts, or, possibly, 50,000 kilowatts over the available interconnections will be of very great help. The checking up from time to time of available capacity and the making of arrangements whereby it can be had quickly will be a matter that will be gone at intelligently. It will not be a matter of wrangling and arguing, and bickering who is to pay and who isn't and what his price is to be. It will be a matter of considering the possibilities as they stand for the common good of all the parties and therein it will certainly, in my opinion, take first place among the reasons for interconnections.

Now, please consider our own practice of which some of you are familiar—others of you are not. We have come to a definite routine here with regard to reserve capacity, which is that the only reserve capacity that is really first-class reserve capacity, as we want it to be, is capacity that is running, that is available instantaneously; and that description is met only by excess above the present load in the machines then and there on the line. We have, in fact, followed that idea up to the point where we habitually buy our turbo-generators with a very decided excess of carrying capacity in the windings of the generators, so that occasional overloads will be handled without impairing the field regulation and stability, and so that an overload can be had at any time without overheating.

Now, to meet that condition in the generators we have developed a method which I do not know has been as yet generally accepted, but I think it is likely to be quite common, of depending on the by-pass valves of our steam turbines to give us excess capacity when required. That is to say, there will be running, say, three or four turbo-generators at one time in one area—in one of our subareas—and these will be running at or about the point of most economical operation which will be, of course, as those of you who understand turbo-generators at all must realize, that point at which the steam which can be passed through the first stage nozzles is being expanded to the limit—to the lowest possible pressure—which is therefore the points at which you may say the first stage nozzles are full, and the condenser is working below its possible capacity. The vacuum is the best possible and the full boiler pressure is being developed to the first stage. Now, the next step in any commercial turbine of today is to open a by-pass which allows steam to enter the turbine further down several stages—further down the series from the first, and immediately reduces the efficiency of the turbine, but may increase its output by say 15 or 20 per cent if the by-pass be fully opened. That means, of course, that more steam has to be made. It means that the boilers must be immediately called upon for more steam; but the nature of these large steam generators of today, whether they be stoker fired or pulverized coal fired, is that they can be pushed with not much diminution of efficiency considerably beyond a point at which one would desire to run them habitually. In other words, with reduced efficiency, that is to say, with a greater use of steam per unit, it is possible to increase the output of a power plant from 15 to 20 per cent by this device of opening by-passes.

Now, if you have a power plant or a series of power plants running, say, five units or six units at one time, these being by assumption identical units, it is evident that you may lose any one of those units and yet pick up the load very promptly by opening the by-passes on the others. Because of the reduced efficiency of the same output you will need more steam and you will have to push your boilers, but you will very immediately have reserve capacity—absolutely immediately available—with nothing more at its worst than a very slight drop in frequency or voltage during the time in which the by-passes are being opened.

It is, of course, possible and frequently done, to put the by-passes on the governor, but that is a condition which, with very large units, is not so stable as the other. It means that any little irregularity in governing swings your turbines past the point of best efficiency and back again. The preferred practice of The Detroit Edison Company is to run with that condition that I have spoken about, namely, very close to the point where the turbine is doing all it can do without by-passes being opened, which point in the ordinary design in your turbine corresponds to the maximum steam efficiency, and at that point having 15 or 20 per cent, according to the design of your turbine, reserve capacity obtainable by the opening of the by-pass valves. In practice the by-pass valve can be opened by hand in a large system, but in a small system with only three or four machines it may be necessary to provide quick opening means or adopt the alternative of putting it under the control of the governor.

Assume you have another system in exactly the same condition. Assume the two are interconnected and running in multiple. I am not suggesting that as the condition that you would, in practice, arrive at, because it is a condition that involves several assumptions which cannot always be made, but assume that that is the case. It is quite evident that the loss of one generator unit has only one-half the possibility of injuriously affecting the service that it had in the other case. In other words, for the loss of any one unit, you have twice the reserve capacity immediately available. Now, that may be interpreted and must be, of course, interpreted according to the law of probabilities—the probability of losing a generator in each system, or two in one system, and so on, and so on. A study of times and seasons, and things of that character, indicates that the chances of coincidence are remote. It does happen. I recall an occasion when The Detroit Edison Company lost three turbines within 48 hours, but that was one of the incidents of the after-war period and was attributable to very natural causes, and losing any one of the three was not a surprise. The only surprise was that they all waited long enough to go off together instead of falling off at intervals. That coincidence is the exception and it takes the exception to prove the rule; so it be-comes evident at once that if you interconnect two systems, each equally self-contained, and each following the same method, you have reduced by one-half the probability of even minor interference with service by the loss of a generating unit. Expressed otherwise, you have added 100 per cent to your reserve capacity. Of course, one may then make elaborate calculations as to what the reserve capacity is worth. In the emergency one can press a reserve capacity that is 50 or 60 or 100 miles away, but it is not reserve capacity under your own hand if even the two systems are in contact at half the distance; neither is it absolutely the same as an increase of capacity in the shape of another set in your own premises, but it is much cheaper and it is likely, according to the application of the law of probabilities, to be just as useful if the interconnection can be made to the extent of one capacity of one generating set. Such an interconnection may be made for a figure very much less than the cost of installing the extra generating set in your own premises. Then the commercial desirability is evident.

Electrical Methods of Interconnection

Now, let us take a look at the possibilities. Interconnections may be either very close or very loose. You may have a trunk line from power house to power house. That has been done in some cases, though usually in cases where there was a certainty that a consider-able amount of energy would always have to be transmitted. Or interconnection may take the form of several fringe connections, which, taken altogether, can be used to transfer a considerable amount of outlying demand to the supply of the other concerns.

It does not follow, in fact, that the two properties must operate continually interconnected. To operate interconnected is not always the simplest thing possible. We know a good deal about it here, because we have been operating interconnected with our own stations of greater or less magnitude almost continually since 1899 and that is quite a few years. We have had, that is to say, more than one source of alternating current supply and these have been interconnected with one another so that they could exchange load and ex-change assistance. From the period, however, of 1915 onwards until now, we have had interconnections between our own big power plants exactly after the fashion that I have described. That is to say, they have been interconnections between self-sufficient and self-contained areas. The method of operation which has been arrived at by chance rather than by design at first, and later by very precise design, is such that the area which each power house could supply and would supply if it were separated is very well defined for the time being. That area was not a constant area by any means. Connors Creek was not required always to cover up to a certain point in the downtown district, and Delray to feed up to that point or division line. The conditions of availability of capacity at these power houses were studied, and the area, measured by different substation areas, which each power house could take care of at the moment with the capacity available, was predetermined and known. An interesting feature which I will speak a little later about, was developed by experience. That was that the interlinking between those areas was not solid—was in fact decidedly loose—because experience, especially experience in the 1918, 1919 and 1920 era, has shown us that too solid an interconnection meant that both these power houses, Delray and Connors Creek, would go down if either got into serious trouble; while a looser connection meant they would cut loose from one another and the trouble would affect only the area served by the one power house, and the effect would be reduced by the fact that only the one generating plant could dump into the fault; and the probability of quick recovery was very much increased because there was an existing service with which the generators of the crippled power house could go into step, as soon as they could be run into step. In that way our present method has been developed, which now includes Trenton Channel, with its distance of 19 to 20 miles as the cables run, and Marysville with its distance of 60 to 70 miles as the cables run. I may note that the distance between Marysville and Trenton Channel by the transmission line through Romeo and Bloomfield and Superior and around into Trenton Channel, is 120 miles long, so that we have an illustration with us constantly of the possibility of interconnecting and operating in multiple two power houses which are electrically 120 miles apart. There is no difficulty about doing it after you know how.

Out of that question of knowing how, however, there comes a great many things that are commercial—a great many points that are commercial. First of all, of course, is how much energy you want to exchange. That has to be settled. That means the extent to which you will make your interconnection—how big you will build your line—how much of an interlinkage you will establish. Then there come all the questions as to how you are going to accept the responsibilities that may arise through habitually running interconnected. We worked out our own problem along the lines I have indicated, by assigning to each power house, for the time being, for that hour and the next hour and so on, a certain load by areas and by substations, and depending upon the breaking loose of that area with its load along with the power house, if circumstances should arise that would cause them to break loose. Doing that sort of thing when you have interests that are not identical, when you are dealing with a neighbor concern whose commercial conditions are those of an independent ownership and independent business, is not altogether as simple as it appears, and many of the most interesting circumstances that have arisen—interesting problems that have arisen—have arisen just out of that. It is becoming very clear now to those people who have effected interconnections that there will have to be a predetermination of what is going to be manually done or what is going to be automatically done under any conditions in which the interconnection is to be of service beyond the mere stabilizing effect that it gives while it is working smoothly. There is, of course, one of the jests of the business. Largely interconnected systems, such a system as the one I have spoken about recently, ex-tending from Milwaukee through into Pennsylvania, and, in fact, to the Delaware River, with several different interests involved—such systems as I have mentioned, are beautifully stable when everything is all right. There are, as you have been told in other meetings of the Institute, certain pulsations backward and forward of current. In other words, the connection is elastic but nevertheless it works very nicely indeed and it certainly does stabilize a great many things that with a less extensive system would be, or, might be, unstable. On the other hand, if there is any instability that is not immediately controlled—anything that upsets the orderly flow of current among these large units and over these great links and distances—then there is a change from a condition of stability to a most outrageous condition of instability instantly, and there is the devil to pay. Now, when that happens to ourselves—when one of our four power houses celebrates by getting into a little bit of trouble or when we have a nasty piece of lightning trouble or substation trouble in one of the areas—we know very well the sheer necessity of limiting the interchange of current, and we know that, even with the best of forethought and the best of precautions and the best available apparatus, things happen that would not happen if the amount of energy that could be suddenly dumped into a fault were less.

Reverting to what I was talking about—mutual assistance—the condition of mutual assistance may or may not be served by running continually linked up and with synchronism. It is very probable that it will not. It is much more likely that the possibility of being of mutual assistance will be better served in the great majority of cases by running with an open end. Under conditions, however, where loads can either be transferred by switching or can be taken up by quickly synchronizing two plants with a well designed routine for so doing, it seems to me, looking at it from the point of view of mutual assistance and of stability of service, that the evidence at the present time is rather against the establishment of tremendous reservoirs of energy, such as some of our good friends that never lived with the darn things have been disposed to propose to us as the ultimate flower of perfection of electrical distribution, and the thing that should be undertaken by the state or Nation. That same tremendous reservoir of energy, if it were a lake with good sluices controlling the outflow, might be useful. If it were a great pile of coal in railroad cars that could be ordered to go wherever wanted, but would not start until ordered, it might be useful. If it were even a reasonably good high pressure water system that could be depended upon to choke itself if the flow developed beyond a certain rate, it might also be very useful. But when we have something that is almost limitless power, doing its work instantly, concentrating all of its energy at one point or another within a distance of 1000 miles or more, and thereby doing the most mischief—the greatest amount of mischief in an instant of time—the case is different. Something of that kind is not just exactly the stabilizing influence and the security of service and what I have called the mutual assistance that we exactly want. It is just a little too much like calling on Michael and all the arch-angels to come and help you suddenly when the bread won't bake. You may get the help but there will be an awful lot of disturbance in the getting. I don't see it as a manager. I don't see it commercially. I do see, however, and I see very soon, that we are all going to be more or Iess interlinked and that there will be a very, very quick picking up of loads—a very, very quick transferring of service also. I can see with proper control of the interchange of energy that there will be actual running in synchronism of adjacent systems, but the extent to which energy can be exchanged will be very extremely limited, and some of the best switch gear that has yet been produced, or is going to be produced, will be required for those interconnections, so that there may be the correct limitation upon the amount of energy that can pass automatically and uncontrolled from the one system to the other. In other words, mutual assistance, increase of re-liability of service, does not at all imply tight interconnections. It may, in fact, under some conditions, imply the exact contrary. It may imply the loosest kind of loose linking, having nevertheless the interconnection available, completely comprehensive and justifiable on the first ground of possible mutual assistance.

The Consideration of Alternate Construction

A little while ago I mentioned the possibility of using excess power, dump power, and so on. That has been done and is being done. Of course, and it is so obvious that I need not enlarge upon it at all, in our own area there is not much of that sort of thing available. I will speak a little later of a rather interesting local exhibit, however, in the class of utilizing power that otherwise would be thrown away. There is, however, another possibility that may be of great value, namely, the alternate expansion of the two inter-connected systems. One doesn't just exactly—one cannot, in fact—correlate his next power house unit, or his next power house, to the expected requirement. You don't order generators nowadays to just meet the exact case of your expected expansion. You don't figure that the next year you are going to have another fifteen or twenty, twenty-five or thirty-five thousand kilowatts and order a generator accordingly. In other words, you don't order generators the way you order coal. You order them in good big hunks. They are good big hunks in any case because, of course, the bigness of the generator is relative, and a 5,000-kilowatt generator to a small power plant may be a mighty big hunk. Ourselves, we are intending to settle down to a 50,000-kilowatt unit as being about as big as is handy and as meeting our requirements pretty well. Indeed, we have smaller generators. We have some very good 30,000 units, but all our recent purchases and the three sets that are coming through and not yet delivered are rated 50,000 kilowatts each. The generators have the characteristics, that I have explained to you, of having quite considerable excess in current carrying capacity, in Kv-a., and the turbines have their best point a little below the 50,000 rating—the rating therefore merely conforming to the standards of the manufacturers. The curve of efficiency is still quite flat at 50,000, but the best operating point is between 44,000 and 46,000 kilowatts. Now, a generator of that size may be just right to carry the predicted increase of load, but at times it may be necessary to have two of them. Once in a while it really pays to put three in- at once—three in a row. What can be saved in unit costs by doing things on that scale is quite unbelievably large. Again, there is the commercial instinct affecting me in my position of a manager. I know, for instance, that doubling the capacity at Trenton Channel is going to reduce the unit cost per kilowatt installed by something like $12 to $13, and I know also that when we can repeat these plant units, using identical units, that we can get a much lower price, not only for the generators themselves from the factory, but we get a much lower total price because we are doing construction work that we have done before —that we have systematized and standardized. Beyond that, from the point of view of the manager, there is the very interesting observation that if we can release certain classes of work, particularly substructure work and steel erection—if we can release these beforehand so they can be done unhurriedly, deliberately, and carefully, with everybody working at highest efficiency under rigid inspection, not only is the work quite a good deal better but the unit cost is a good deal lower.

I don't want to tell tales out of school, but the difference between the cost of substructure released a year in advance and substructure put in in a hurry, even from the same plans and by the same experienced crews and as repetition work, so there are no novelties in it—the difference between these two is enough to make the doing of the work in advance very attractive indeed to the manager who can find the money and who can keep the construction organization on hand.

All of these things mean that if you have two, three or four, interconnected plants, a comparison of construction programs may be exceedingly helpful and will be exceedingly helpful, and that A, B, C, or D, as we may call the plants or systems for convenience, may decide among them that this one or that one or the other one for the time being is to be somewhat overdeveloped and-the others, by reason of this interconnection, will use the excess capacity. That means that the possibilities of orderly construction are divided to the best purpose among the interconnected companies, that no one of them need be hurried, and that no one of them need be premature. That if, by way of assumption, they are all equally capable of financing their construction, the work can be done at the lowest total cost and thereby ourselves and the public be served to the best purpose.

I think after the possibility of mutual assistance, that this possibility of what I have called alternate construction is the greatest and most important. It certainly does so appear to me after very much study of the possibilities in that line.

Collateral Possibilities of Interconnection

There are other obvious things. There is the matter of incidental sales. Somebody's development runs a little bit ahead of his requirements and he finds out which of his neighbors is running low and he can spare him some power and is willing to sell it cheap. There is the possibility of overhaul work being done and there has been times, I can tell you, here in Detroit, we should have been tickled to death if we could have from 25,000 to 30,000 kilowatts from some of our neighbors so we could do something that very much needed doing but had to be postponed until we had the capacity excess available of our own. And these are the things, rather than the possibility of continuous selling of current by one company to the other, that are going to justify ultimately the interconnection of all contiguous systems all through the United States. Interconnections taking the form that is the best and most desirable under the circumstances, varying as I said, from trunk lines that will connect centers of distribution or centers of generation together, to merely squirrel tracks of interconnections along the outskirts of the two plants whereby outlying districts can be passed over pro tem to the neighboring concern to be supplied with your current. I have sometimes been a party to such swapping of current, it being furnished by us instead of by a neighbor, or by connecting lines with which I was associated other than The Detroit Edison Company, instead of by a neighbor, and have found it exceedingly convenient. These, of course, were interconnections in a sense but were inter-connections of what I call the fringe type.

Now, to study our own area here for a minute, I have said that the cheapest way of moving energy in this neighborhood is in coal cars. That is to say, though present freight rates are double what they used to be, you can put a certain amount of potential energy into Trenton Channel in the shape of reasonably good coal coming up from the south, much cheaper than you can generate it near the mines and send it to our points of consumption over any transmission system. In other words, it is cheaper to pay freight on the coal from the mines to Trenton Channel and generate the energy there, than it would be to generate the energy at the coal mine and use a transmission system to get it to our distribution. There is also the question of reliability. I do not propose to go into the technique of reliability but we know the number of spare lines that have to be available if you propose to depend on high tension power lines for continuous service, and that the number is quite large, and of course, the energy that comes in that form cannot be stored, whereas you can develop a pretty good coal pile on your own lot. Most of our coal, of course, comes from the south. All of it comes from the south. We have some mines in Michigan but the output is used locally and the output is small. The differential between Ohio and Michigan freight rates is such that there is very little probability of any Michigan plant selling current to the south, all other things being equal. But there is one inequality that alters that particular case. Central Standard Time—90th Meridian time is the better way to call it because the Lord only knows what Central Standard Time is when the people begin playing with it and giving us the so-called daylight-saving time—90th Meridian time prevails in Indiana and well into Ohio. In eastern Michigan, 75th Meridian time is used and it is evident to you that there will be a time in the evening where Detroit, running on 75th Meridian time and having the load characteristic of a metal working district, which is the dominating industrial characteristic in the Detroit electric system, will be dropping its load at the time when the Indiana and Illinois and west Michigan systems are picking up load. That 1 hour step between the time zones, of course, is exceedingly convenient but it does work a little to the disadvantage of those cities and communities upon which it imposes a slow clock. The habit and custom of people going more or less by the clock is manifested in that the only way you can persuade people to get up earlier in the morning and go to work earlier in summer is to set the clock an hour ahead—daylight saving, as they call it. That habit sticks out quite prominently in the comparison of load curves between Detroit and Chicago or Fort Wayne, Indiana. It becomes evident at once that the industrial areas of north Indiana and northwest Ohio and west Ohio in general, might very well indeed utilize power during their peak loads that this area could spare. Now, of course, Detroit is in the peculiar situation of practically never having an evening peak load. If it has one it is from some entirely abnormal cause. If we have a peak at all we usually catch it in the forenoon. It comes usually on a very dark, dirty morning such as we have had already this autumn, and we seldom have any evening peak, and we don't have any peak of any length whatsoever such as is caused in Chicago and in the 90th Meridian towns which lie nearest to the 75th Meridian zone. That is to say, those towns in which the 90th Meridian time means a slow clock, have a peak due to the overlapping of the lighting load with the industrial power load; and it becomes evident that there may be conditions in which current generated at actual higher costs may be deliverable into that territory profitably, because delivering that current will mean that a plant already in existence can be used and it will be unnecessary to build a local plant in order to take care of that evening peak load. That difference in time zones is going to cause and has already caused a shifting of energy through interconnections across zone lines in a way that is going to be helpful to all the parties, because the investment costs are going to be kept down thereby. Whether the thing will go so far as to have current generated in or near Detroit used to help out the plants at the south end of Lake Michigan, remains to be seen. I don't hardly think it. I think all the economical conditions as we know them are rather against that. But current generated in the 75th Meridian zone in Ohio will inevitably be delivered into the eastern side of the 90th Meridian zone and is being already so delivered. That, of course, means improved load factors for the generating plant. It also means improved load factor for the receiving plant, because the existing plant will be loaded and there would not be required an addition to the denominator by which the total output must be divided. That is to say, the plant in that district will be well loaded while the plant in the 75th Meridian district will have an improved load factor.

I say to you all as a manager, that the improvement of load factor is the most serious consideration that is before us as managers today. We have been faced through a long series of years with rising investment costs. The cost of everything is up. The cost of labor and material has gone up. There is an arrest of that rise at the present time. Unit costs of power plants are even tending to decline. Unit costs of various constructions in terms of the availability of those constructions are also tending to decline. That is due largely to improved engineering for which you gentlemen are responsible and for which you deserve credit. It is also due to conditions of the market which are due to causes outside of engineering, but until very recently the ratio of investment to gross earnings of all of our large plants was getting worse. We were taking a longer time to turn over the capital. We were reaching out toward the place where instead of say a maximum for a well balanced, conveniently arranged property of $4 of capital to $1 of annual gross earnings—we were reaching out toward the place where it was going to be $5 in capital. Remember that operating ratios are such that we need from one-third to 40 per cent of our gross earnings to meet fixed charges. You will understand that this condition where the fixed charges tended to run up much more rapidly than the earnings was a very grave condition, and interconnection, so far as it modifies or ameliorates that condition, is going to be a very great help to us.

I can tell you also, speaking as a manager, that the keeping down of first costs within reason is one of the most important engineering problems of today. I am occupying the point of view of the man who has to raise the money. I do not mean skimping of the cost of constructing a plant by making a plant that is hard to operate and costly to maintain—a plant in which you cannot keep the men because it is so inconvenient. I don't mean that at all; but I mean the problem of building a really first-class plant that men are glad to operate and of which they can maintain the initial efficiency, for lower costs than have heretofore been common, is the biggest problem we have before us today. The other face of that same problem is the finding of greater usefulness for the existing plants; in other words, improving the annual load factor. To whatever extent these conditions are helped by interconnection, it will be an unqualified good thing.

You will remember, of course, that the unit price at which our output is sold is down. It is down to pre-war figures—down below pre-war figures in many cases. The service which is represented by the sale of one kilowatt-hour of residential service, or commercial or industrial, is delivered now for the same price at which the same amount of service, represented by the sale of one kilowatt-hour, was delivered before the war. That is the case over the country at large. In our own area it is being delivered at a lesser figure. That downward tendency is inevitable. It is helpful in that it is increasing sales. Lower prices for our service may yet be warranted because the law of diminishing returns has not yet become controlling. The actual reasons why our prices are lower are, first of all, that our costs are lower and that is due to some extent to improved engineering and to some extent to conditions of the markets that have reduced the unit cost of construction. Secondly, it is due to the greater use of our service—to the education of our public and development of new uses, uses that were undreamed of six or seven years ago. All of these causes have tended to a greater utilization of our output and thereby to improved load factors, to production on a larger scale, to the possibility of building larger power houses at lower unit cost, and so forth all the way through. These are conditions that I, as a managing engineer, must look out for, and are not technical considerations which would properly come before the Institute. Therefore my views on interconnections may seem to you to be somewhat prejudiced.

Interconnection With University of Michigan

Now, we have a very interesting little exhibit of interconnections which; inasmuch as it is really an exhibit and a most educational exhibit, I feel quite free to talk about. The only effective, every-day, honest-to-goodness interconnection that my Company has is with the power plant of the University of Michigan. Please don't laugh. The history of that power plant—those of you who are from Michigan know that for a long time it was an exhibit of everything that a power plant ought not to be. I remember a certain friend of mine, who is now gone where all good engineers go, who made a remark that is very applicable. He was asked what he did with his cinders. The probability of selling cinders at that time was not thought of. Nowadays we have a market for cinders if they are well burned. These were not as well burned as they might be. Somebody in a Detroit Engineering Society meeting of possibly twenty-five years ago, asked him, "So and so, what do you do with your cinders?" He said, "I don't do anything with them. The Grand Trunk Railroad hauls them away." And the speaker asked, "What does the railroad do with them?" And he said, "Burns them." Which was a libel, of course, on his cinders and on the Grand Trunk Railroad and each of them deserved it. That tale is not exactly applicable to the old plant of the University of Michigan; but I certainly saw a good deal of cinders hauled away from it that could have been burned. The regents asked for advice, and now they have a plant that is a credit to the University, and our interconnection with it is our only continuous interconnection. As a matter of fact we are connected with the plants in the Thumb District and deliver current to them as required. We have other occasional interconnections of rather minor character; but the one interconnection that has really stabilized itself commercially and settled down to business is the one with the University of Michigan. There were a lot of interesting problems—for instance, how things were arranged to take care of the situation when something went wrong with the Detroit Edison system and the voltage dropped and the University plant must not try to run the whole system. The way that was arranged is an interesting story of a nice little problem in electrical engineering that had to be solved and has been solved quite satisfactorily.

During the summer, only a small amount of energy is required by the University and it really does not pay to run the power plant; and the plant, as a matter of fact, is not run. During the winter months there is a great deal of steam required for the heating of the University buildings, the hospital and so on, and the design of the plant is such that the heating steam is run first through part or all of the blading of the turbines, if there is any work for the turbines to do. At night, or, rather, in the early morning—in the cold gray dawn of the morning after, so to speak—the heating up of the buildings is purely a problem in delivery of steam heat. There is almost no 'light or power required then by the University and therefore, until quite recently, live steam was shot into the heating mains. For the last two winters the steam has been run through the turbines, and the turbine capacity, in excess of that which was actually being used by the University buildings, has been turned into the Detroit Edison system. Conversely, at mid-summer, as I have said already, the Detroit Edison system is drawn upon for current. On days that are betwixt and between, autumn days when there may be in the morning a demand for heating and at other times during the day, the condition is reversed and the demand for light and power is in excess of the heating steam. The load then drifts across the zero line, current coming in or going out just as the case requires. Double metering, of course, takes care of the record and the thing has worked out very well. It is quite evident of course, that if the University had to put live steam into those lines there would be a waste of possible power which could be generated for very few additional heat units. The amount of additional heat is exceedingly small, that is required to be put into the steam to make the apportionate amount of kilowatt-hours. Under the converse condition, to push those turbines up to the point where steam would have to be exhausted to the atmosphere would likewise be wasteful. They would be running as low efficiency, noncondensing turbines, and under that condition to take some current from the Edison Company system is cheaper in total cost. There is a little incidental phase to it, which is, that under some conditions the excess current produced by the University in the small hours of the morning and turned into the Edison Company 'system, allows the ponding of water on the small Huron River water powers. These are water powers that are entirely insignificant—totally insignificant in comparison to the proportion of the total requirements, amounting to only six or seven thousand kilowatts of a day load that ranges up occasionally to 480,000. The excess power from the University plant permits, for the time being, the stopping of the flow of water out of the ponds and permits the ponds to fill up. There is thus an actual, definite saving by storage of energy, which is all to the total good.

From the commercial point of view the interesting item is how the equities are adjusted. They look complex—they look so complex, in fact, that when we began to think about them we engineers decided it was a problem for the faculty in economics and not for us, and we gave it to them. It is a good thing to give a faculty in economics something once in a while which is a real practical problem, and it was duly discussed and considered and so forth, and brought to this conclusion: That if by assumption the University was a self-contained economic unit, making its own electricity and perfectly independent and not at all at the mercy of the Public Utility Company; and, if, as between the two, there was no special duty toward the University on the part of the Utility, or vice versa; and if this arrangement actually reduced total costs to the two parties, then the savings should be divided equally between them. That is good logic and good sense, and what actually happens is that careful determinations are made from time to time as to what additional amount of fuel, oil, labor, and so forth, is involved in generating excess capacity in winter and turning it into the Detroit Edison system; and conversely, it is determined what that same delivery of energy at the same point would cost if, say, it 'came up from Trenton Channel as additional output; and the difference is shared fifty-fifty. It may surprise you to know that the excess current developed by the dinky little plant cost a good deal less in heat units, labor and everything else than the same amount of current would if it came from Trenton Channel. It is necessary that only a trifle of additional heat be put into the steam in order to allow it to do work in the turbo-generators. The share of the saving is a very measurable credit to the total cost of the operation of the University plant. Conversely, in the summer time a determination is made of the costs of operating the University plant noncondensing. There can be no heating use for the steam. A determination as of the same date is made of the costs of delivering the current from The Detroit Edison Company. There is perfect frankness between the parties, and the difference between the cost that would be excessive if the plant had to be run noncondensing, and The Detroit Edison Company costs, is divided equally. You can say now that the University of Michigan is the first institution of learning in the country to avail itself of the economic possibilities of interconnection.

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