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Rh incandescent lamp was brought before the general public. In 1882 parliament passed the first Electric Lighting Act, and considerable speculation ensued. The aggregate capital of the companies registered in 1882–1883 to carry out the public supply of electricity in the United Kingdom amounted to £15,000,000, but the onerous conditions of the act deterred investors from proceeding with the enterprise. Not one of the sixty-two provisional orders granted to companies in 1883 under the act was carried out. In 1884 the Board of Trade received only four applications for provisional orders, and during the subsequent four years only one order was granted. Capitalists declined to go on with a business which if successful could be taken away from them by local authorities at the end of twenty-one years upon terms of paying only the then value of the plant, lands and buildings, without regard to past or future profits, goodwill or other considerations. The electrical industry in Great Britain ripened at a time when public opinion was averse to the creation of further monopolies, the general belief being that railway, water and gas companies had in the past received valuable concessions on terms which did not sufficiently safeguard the interests of the community. The great development of industries by means of private enterprise in the early part of the 19th century produced a reaction which in the latter part of the century had the effect of discouraging the creation by private enterprise of undertakings partaking of the nature of monopolies; and at the same time efforts were made to strengthen local and municipal institutions by investing them with wider functions. There were no fixed principles governing the relations between the state or municipal authorities and commercial companies rendering monopoly services. The new conditions imposed on private enterprise for the purpose of safeguarding the interests of the public were very tentative, and a former permanent secretary of the Board of Trade has stated that the efforts made by parliament in these directions have sometimes proved injurious alike to the public and to investors. One of these tentative measures was the Tramways Act 1870, and twelve years later it was followed by the first Electric Lighting Act.

It was several years before parliament recognized the harm that had been done by the passing of the Electric Lighting Act 1882. A select committee of the House of Lords sat in 1886 to consider the question of reform, and as a result the Electric Lighting Act 1888 was passed. This amending act altered the period of purchase from twenty-one to forty-two years, but the terms of purchase were not materially altered in favour of investors. The act, while stipulating for the consent of local authorities to the granting of provisional orders, gives the Board of Trade power in exceptional cases to dispense with the consent, but this power has been used very sparingly. The right of vetoing an undertaking, conferred on local authorities by the Electric Lighting Acts and also by the Tramways Act 1870, has frequently been made use of to exact unduly onerous conditions from promoters, and has been the subject of complaint for years. Although, in the opinion of ministers of the Crown, the exercise of the veto by local authorities has on several occasions led to considerable scandals, no government has so far been able, owing to the very great power possessed by local authorities, to modify the law in this respect. After 1888 electric lighting went ahead in Great Britain for the first time, although other countries where legislation was different had long previously enjoyed its benefits. The developments proceeded along three well-defined lines. In London, where none of the gas undertakings was in the hands of local authorities, many of the districts were allotted to companies, and competition was permitted between two and sometimes three companies. In the provinces the cities and larger towns were held by the municipalities, while the smaller towns, in cases where consents could be obtained, were left to the enterprise of companies. Where consents could not be obtained these towns were for some time left without supply.

Some statistics showing the position of the electricity supply business respectively in 1896 and 1906 are interesting as indicating the progress made and as a means of comparison between these two periods of the state of the industry as a whole In 1896 thirty-eight companies were at work with an aggregate capital of about £6,000,000, and thirty-three municipalities with electric lighting loans of nearly £2,000,000. The figures for 1906, ten years later, show that 187 electricity supply companies were in operation with a total investment of close on £32,000,000, and 277 municipalities with loans amounting to close on £36,000,000. The average return on the capital invested in the companies at the later period was 5.1% per annum. In 1896 the average capital expenditure was about £100 per kilowatt of plant installed; and £50 per kilowatt was regarded as a very low record. For 1906 the average capital expenditure per kilowatt installed was about £81. The main divisions of the average expenditure are:—

The load connected, expressed in equivalents of eight candle-power lamps, was 2,000,000 in 1896 and 24,000,000 in 1906. About one-third of this load would be for power purposes and about two-thirds for lighting. The Board of Trade units sold were 30,200,000 in 1896 and 533,600,000 in 1906, and the average prices per unit obtained were 5.7d. and 2.7d. respectively, or a revenue of £717,250 in 1896 and over £6,000,000 in 1906. The working expenses per Board of Trade unit sold, excluding depreciation, sinking fund and interest were as follows:—

In 1896 the greatest output at one station was about 5 million units, while in 1906 the station at Manchester had the largest output of over 40 million units.

The capacity of the plants installed in the United Kingdom in 1906 was:—

The economics of electric lighting were at first assumed to be similar to those of gas lighting. Experience, however, soon proved that there were important differences, one being that gas may be stored in gasometers without appreciable loss and the work of production carried on steadily without reference to fluctuations of demand. Electricity cannot be economically stored to the same extent, and for the most part it has to be used as it is generated. The demand for electric light is practically confined to the hours between sunset and midnight, and it rises sharply to a “peak” during this period. Consequently the generating station has to be equipped with plant of sufficient capacity to cope with the maximum load, although the peak does not persist for many minutes—a condition which is very uneconomical both as regards capital expenditure and working costs (see : Electric). In order to obviate the unproductiveness of the generating plant during the greater part of the day, electricity supply undertakings sought to develop the “daylight” load. This they did by supplying electricity for traction purposes, but more particularly for industrial power purposes. The difficulties in the way of this line of development, however, were that electric power could not be supplied cheaply enough to compete with steam, hydraulic, gas and other forms of power, unless it was generated on a very large scale, and this large demand could not be developed within the restricted areas for which provisional orders were granted and under the restrictive conditions of these orders in regard to situation of power-house and other matters.

The leading factors which make for economy in electricity supply are the magnitude of the output, the load factor, and