The Hydro-Electric Power Question
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The Empire Club of Canada Addresses (Toronto, Canada), 27 Dec 1906, p. 131-144
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Smith, Cecil B., Speaker
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Text
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Speeches
Description
An historical review, leading up to the condition of the art or science of distributing electrical energy at the present moment. The main sources of power of value in commercial and industrial life. The use of fuel one hundred years ago as applied to the development of power by steam. A gradual perfecting of this method over the last 25 years. The steam engine perfected a long while ago. The development of water powers. The discovery, some 20 years ago, that electric power could be transmitted over a wire, in a commercial manner. The second stage of development, passing from the scientist to the sharp-witted financier. The importance of water power to the Province of Ontario. Our dependency on the United States for fuel. Horse power within the settled parts of the Province. Horse power available for present and future use. How this power can be augmented. An illustration. The use of electric energy for a city. Natural monopolies. Asking "Whose monopoly should it be?" The use of electric power and how it might be distributed. The Power Company of Hamilton. Dealing with peak load times. Learning from what other people in other parts of the world are doing: in Italy, Switzerland, France, Mexico, the United States, Africa. Development in Niagara Falls. The situation locally, from five years ago up to the present. The Canadian Niagara Power Company. The Ontario Power Company. Methods of transmission. The condition at the present time in Toronto. Cost of distribution. The great benefit of distribution of electrical energy in a city. The speaker, urging to the audience that the distribution of electrical energy is a natural monopoly; that it should be done by one Company, that the only question to decide is whether we should use financial strength and go into the business for the sake of having that distribution carried on more cheaply than a Company could carry it on. Asking that we consider that there is an unlimited source of electrical power at Niagara Falls, and that the use of that power throughout this peninsula will maintain its industrial position.
Date of Original
27 Dec 1906
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English
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  • Ontario, Canada
    Latitude: 43.70011 Longitude: -79.4163
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Full Text
THE HYDRO-ELECTRIC POWER QUESTION.
Address by Mr. Cecil B. Smith, C.E., Chairman of the Hydro-electric Power Commission, Ontario, before the Empire Club of Canada, on December 27th, 1906.

Mr. Chairman and Gentlemen,--assure you I consider it a great honour to be invited to address the Empire Club. It is a Club that I have known of and have been thinking of joining. I hope I will be given the opportunity of doing so. You have done me the honour of asking me to address you on a subject which, I suppose, may be considered to be of interest in some form or other to almost every citizen, and as I Have been interested in the matter for a considerable number of years, I will endeavour to make some remarks which may perhaps be of interest and value to you at the present time. The question is of a somewhat controversial nature, and I do not think it would become either me or the dub that it should be treated in this manner, and, therefore, it appears best to leave the treatment in the form of either a history or a prophecy, and as a prophecy is rather a thankless task, I would prefer to treat the matter historically, leading up to the condition of the art or science of distributing electrical energy at the present moment.

As you are aware, the main sources of power that are of any value in commercial and industrial life are fuel and water. There are others, but they are not of commercial importance. In the earlier days, a hundred years ago, the use of fuel as applied to the development of power by steam was studied and brought into a commercial condition, and we have had for the last twenty-five years a gradual perfecting of this method of the use of power; that is, the steam engine was, practically speaking, perfected a long while ago. Since that time a great many improvements have been added from year to year, until at the present time we may say that the steam engine method of producing power is practically standard and is as perfect as can be obtained, humanly speaking. At the same time in certain localities in the old lands and later in America, use was made of water power.

At the time water powers were first developed, it is evident that they must have been used only locally. That is, a small village or town sprang up in consequence of the use being made of a water power in grinding or in milling, or the various other purposes which come easily to your mind. This brings us up to a period of some twenty years ago, and then the scientists discovered something which I believe you do not yet fully realize. It is something which will enable the distribution of the people on the earth's surface to be considerably changed from what it was, and is going to be a very important factor. Some twenty years ago it was discovered that electric power could be transmitted over a wire and naturally it soon became demonstrated that it could be done in a commercial manner. First of all it was a plaything. At Frankfort they carried some power a short distance. That was the beginning. It is interesting that at that time, in that country, and at that place, there was developed probably to the greatest extent yet developed the method of rope drive. A water power of considerable size, some thousand horse power, generates power on one side of the Rhine and transmits to a large number of factories a considerable amount of power by wire rope; and there was the infant electrical idea springing into being almost in the same locality.

As soon as it became evident that large amounts of power could be distributed over considerable territory by electrical energy, it naturally passed out of the hand of the scientist, not entirely, but in this sense it passed into the hands of the sharp-witted financier. This was evidently the second stage. As soon as it became evident that this thing could be done, the brightest commercial minds of the country would naturally say to themselves, "Well, now, what use can we make of this in order to make money?" There may have been many cases in which a person engaged in his own industry acquired a water power and devoted that only to his own industry, but the natural development beyond this point was that financial interests should study this matter from a financial point of view, and you have around you now evidence of the result. Mr. Chairman, I thinly it would be well to dwell for a moment on the importance of water powers to this Province, because, as you know, the Province of Ontario and the Province of Quebec are each dependent on a foreign supply of fuel. The wood supply is a thing which will disappear in time, in fact it has practically disappeared. We have to depend upon the United States for fuel-we have always to depend upon them far fuel, and, therefore, if we can develop some latent source of power in our Province, and create an asset in the Province and rid ourselves of the necessity of purchasing so much fuel from a neighbouring country, we will have done something which will form a stable basis for our industries for all time to come.

That is a point that I would like to have you consider, that this development of water powers, and the distribution of energy therefrom, is something which the industries can count upon, humanly speaking, forever; for, so long as the winds blow the atmosphere will ascend, and will have in it sources of power which can be used by man for his industries. It is a continuous cycle which a good Providence has provided for us. Fortunately the Power Commission has covered the Province fairly well, not entirely, but the figures of the present time would warrant this assertion--that considering that the Niagara Falls, and the St. Lawrence River, and the 500, and an other international or inter-provincial waters, belong only one-half to Ontario, then we have available within the settled parts of the Province three and a half million horse power, and I think it is a safe estimate to say that there is nearly as much more in those portions of the Province which will later on become populated, so that you can see that you have available five or six million horse power rightfully belonging to this Province; and I would say that that is based on the most unfavourable condition, which is what we speak of as the minimum or dry weather continuous flow, and I will explain in a moment how this can be augmented enormously so as to increase the value of these water powers.

I do not want to make an assertion which would be quoted, but merely as an illustration. We will suppose that water power as a whole can be supplied to the customers at, say, $25 per horse power per year, and that supply of power? by the present methods from steam, costs $35, just as an illustration: The conditions vary with every place--the cost of coal, the distance, water power, and thousands of other special and local considerations, but there is a large margin between the two, and a difference of $10 leads to what conclusion? That as these powers continue to be used, you have got an asset of $10 per horse-power, which you have to capitalize, that is $200 per horsepower latent and outside of any investment, and if you multiply that by 31/2 million you have $700,000,000 as being latent at our doors at the present time, within the confines of the settled portions of this Province, to be made use of to operate and increase and to make stable forever our industries.

To refer to the use of electric energy for a city, for any city, this is a thought that is worth while dwelling on. Practically all of the uses to which electric energy is put are in themselves natural monopolies, a Street Railway, electric light for your house, for the street lighting, and for the various uses of power, necessitating distribution of the current by under6ground or overhead methods. These are evidently all natural monopolies, and a question always, to my mind, has been, given that that thing should he r natural monopoly, it ultimately will become so, and so the question is " Whose monopoly should it be?" As to the use of electric power-many of you here, no doubt, are more familiar with factory equipment than I am, many of you probably being owners of factories operating steam or electric motors. There is one thing certain, it has been demonstrated, that in operating a factory by a complicated system of drives of pulleys and shafting, carrying the power and transmitting it from one floor to the next, the amount of power used is very much in excess of the amount which you would require if you equipped the factory with electric motors. The proportion has to be figured out for each factory, but I know of cases in which the amount of power has been reduced as much as fifty percent. You, might look on that as the maximum limit. You save an enormous amount of power, wasted in the driving pulleys and belts and the machines themselves. On the other hand, you don't require to use all the machines at the same time, and you often have to drive an enormous amount of idle machinery if you are connected up and driven from a central point of energy. This has been worked out for many factories, and, therefore, I think you can take it as certain that, provided you can get the energy in large quantities at rates less than coal rates, you will not only have the saving in that respect, but you will have the saving of using less power. Therefore, your saving may be of a double nature, and that is why, in many cases, companies are able to sell power at what appears to be high rates, and the parties using it realize that they can even afford to pay a little more than they did for the steam and still have a saving.

Another feature which has been developed to a considerable extent by power companies, very shrewdly arid sensibly, and a thought that is well worth carrying further, is this, that in the distribution of power, the larger it becomes and the apparently more complicated it becomes, the more favourable it is to the party in the business, because if you have two customers they may use all, or the maximum amount of their power at a given moment; but it is positively certain if you have two thousand customers, they are not all going to call for the power at the same time, and, therefore, although there is a pronounced peak load which has to be provided against, and which is always a stumbling block, yet the distributing companies provide for that in many ways. I will consider them, and to bring in another thought, power companies want customers, and you will find that, generally speaking, they either create them or buy them. Take Hamilton-all of the utilities there are taken care of by the parent Power Company. The Power Company, once it started, wanted customers. It bought the Electric Company and the Street Railway Company, and it acquired the Suburban Railways and arranged for the supply of light, until it gathered round it a large number of large customers which are permanent. Amongst those is one which is very useful. Apparently a Street Railway is a very bad customer, because it wants the greatest amount of power just at the time when everybody else wants it--at 6 o'clock. The direct current, which is the kind used by street railways, can, however, be stored. The development of storage has not been carried so far as it probably will be, but in the smaller towns, to a greater or less extent, the storage of direct current is made use of to carry the Street Railway load over the troublesome period of the day.

Then, again, there are certain industries which are willing, for a consideration, to cease operating at an earlier period in the afternoon in the winter season. That is what is called a limited-hour contract. Many of you engaged in certain industries will say that is not feasible, but it is worked out practically in a large city with varied industries where there are some who will be willing to cease operation at ¢.30 or 5, depending on the time of the year, and will remain shat down until after six o'clock. That, again, enables the heavy period of the clay to be taken care of in a way that will enable the distributing company to sell their current, not twice or thrice over, but to sell it for a larger period of the clay. That is not a matter of so great importance in steam operation as in water power, although, of course, you have a large investment in a steam plant whether you sell power during the 24 Hours or not. The fuel is one of the largest items of expense, and, therefore, if the generating of power is done by steam there is considerable economy in being able to slack off during the slack hours, but with a water power development it is evident that everything goes on whether you have a customer or not, therefore, the creation of water power energy has a tendency to lead industries to carry on their operations through longer hours. This has resulted, in the United States, in many cases, in working factories through three eight-hour shifts, but I understand the factory laws are such here as to male it practically impossible to operate factories, requiring female labour, in the night. That will restrict the carrying on of industries through the night hours.

Before I touch briefly on the local condition in Toronto, which I would like to do in a general way, I would like to refer to what is going on elsewhere. We can often learn a great deal from what other people are doing. First, as an illustration, the Kingdom of Italy has wonderfully developed its water powers in the northern part of the Kingdom, and very recently it has arranged that the Government of the country shall spend $40,000,000 in the development of water powers, showing the great faith that they have in the value of these water powers, and they are, roughly speaking, situated about as we are. They have to bring their coal long distances. You cannot help but be impressed in the north of Italy with the tremendous expense that they have done to to develop water powers, which we would not be considering at the present time because we have better ones. I remember one in which they drove a tunnel about two miles, and then they built a stone aqueduct for two miles further, and all for development of steam two or three thousand H. P.; an amount which we would hardly think would justify such expenditure.

In the two neighbouring countries of Switzerland and France they have, as you are aware, large water power possibilities, and these have been developed away beyond anything that we have attempted yet in the way of completeness-many small powers developed and distributed over a reasonable territory in the vicinity to small users. There is one water power developed there, only two thousand H. P. that is distributed over an area of 15 miles in the country in such small amounts as one, two, three, and four horse powers; to lace makers and industries of that kind in the peasants' village homes, and is used by these industries entirely in that way-no large consumers at all-and this has been done to a great extent in Switzerland, except that they are devoting some of it to the operating of electric roads. Coming nearer home, you are probably aware Canadian capital is invested heavily in Mexico for transmission of power for greater distances than is in operation between Niagara Falls and Toronto. Coming to the United States, which is more applicable, there are certain parts of the country in which the transmission of power evidently was a profitable investment; for instance, in, the mountainous district of the Pacific coast, and this has resulted in a great many developments in California in which power has been transmitted as far as two hundred miles. One of two hundred and fifty miles has been operated in that way for a short time. You can consider that, for the present, two hundred miles is looked upon as quite practicable and the amount of loss in power in sending it that distance is fairly well known and, although there is very much more development in the United States at the present time than in Canada, in total, there is not so much more in proportion.

The reasons are obvious. In the greater part of the United States they are not so fortunately situated as we are with reference to water powers. Their streams flow from cleared country or at any rate from country not dotted with lakes and ponds, and, therefore, the flood water goes away rapidly. This is perhaps more noticeable, than anywhere else, in the Southern States. There are a great many rivers flowing towards the sea in which there are perfect torrents in the spring time, rising sometimes thirty feet in height and yet, in spite of this difficult handling of water powers and in spite of coal being available at reduced rates, in spite of all this, they are developing the water powers to an enormous extent on the Appalachian slope. In driving cotton factories and making use of them to an economical extent, as I pointed out, they equip each set of machines on each floor with individual motors. They are contemplating greater things and there is at the present time, under survey and in process of construction, a very large water power on the Susquehanna, for delivery in Harrisburg; and a much larger one being now situated at Keokuk, on the Mississippi River, developing the whole river for power. That is a very difficult river to handle, with its enormous floods and shifting bottom.

We will be called upon to admire a still greater expansion of the question of distance transmission soon. You' probably have noticed it in the press; In South Africa the Rand requires power, lots of it. Coal is expensive. Seven hundred miles to the north is the Victoria Falls. This is not a fairy tale nor a dream. Practical engineers and financiers are about to undertake the delivery of power seven hundred miles, and, curiously enough, there are two features which come up that are interesting. One is, that they have had to drop back to direct current to do it, put their machines in series, get their voltage up to one hundred and twenty or one hundred and eighty thousand volts and deliver it at the other end; use a series of machines which will bring the power down to normal conditions and construct enormous storage plants there, either by electric storage batteries or, as I have seen it mentioned, by means of pumping water up to a reservoir and holding enough of it so that in case of interruption to the line, they would be safe against that interruption. To take care of seven hundred miles of line through an uncivilized country is quite a problem, and they propose to provide for it in that way.

To briefly speak of the situation in our own district, as you are aware, some fourteen or fifteen years ago some enterprising men, a lawyer and an engineer and one or two financiers, considered that the time was ripe for the development of Niagara Falls. They secured certain rights, and the Niagara Falls Power Company was commenced.* In 1897, I think it was, what was then

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* On the United States side.-EDITOR.

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preparations for the carrying of that power to Buffalo. That is their set policy; then, alongside of that came the Ontario Power Company-American capital again, and American engineers.

Some two years later a company, The Toronto and Niagara Power Company, organized by Toronto men, using American and English capital, I believe, started, and now their machinery is in operation to a limited extent, and I suppose you can safely say that in six months from now, or a little later, there will be one hundred and fifty thousand horse power available on the Canadian side of the river, and these plants are all designed with a view of increase. The Canadian Niagara Power Company has an open wheel pit bucked up ready for sixty thousand more. The Toronto and Niagara Power Company is ready to do the same. Its pit is built and finished, ready for the machinery. The Ontario Power Company have built works for one hundred and eighty thousand horse power, so that you see you have available practically at your doors at the present time, an enormous amount of power, enough to satisfy all the needs of this Western Peninsula for some time to come.

A knowledge of the methods of transmitting it are practically exact. It has got beyond peradventure that there is any interruption of service that need be considered serious, and it is all down to one point, all that is left is the question of price. You can get all the power you want. You can get it transmitted to Toronto and farther. They are transmitting it to Syracuse, 165 miles, and are ready to transmit all the power that is required. Now, I do not propose to go into the political side of it, but I would simply say that you are all aware that the Power Commission of the Province was appointed for the purpose of carrying out the desires of the people. That, as I take it, is the intention, not to develop any fad of their own, simply to do what is required of them by the people. The condition at the present time is that the Commission is in existence and is ready to do what the people desire it to do in that direction. There is a definite act; a study of the situation ha been going one for how long? Not, as you would think by articles in the press, for the last few weeks. The matter has been considered for five years and we are not the first ones that have studied it. A quite independent organization of engineers from Montreal, in the employ of the strongest corporations in the country then and now, made an estimate for certain municipalities as to the cost of delivering power to those municipalities. Later on, the Ontario Government were good enough to ask me to carry out a similar but larger question, and studies were made along similar lines. The estimates of the cost of delivering power, as worked out by myself and assistants, in whom I placed entire confidence, are in this report which is available to you. Later on, the Commission, and I am free to confess acting considerably on my advice on the matter, employed a new engineer, an engineer whose reputation and experience will stand the most thorough investigation. We investigated thoroughly; we had applications from Europe, United States and Canada, and this man was selected as being the man that we considered the most experienced, the most reliable, most thoroughly educated, and the most unprejudiced man that could be brought to the assistance of the Commission.

I am not here to discuss any further Mr. Sothmann's recommendation, but I have full confidence that whatever the Commision says can be done; the cost at which delivery of power can be made in the city of Toronto or any other city has been made after careful consideration, after the fullest enquiry as to prices and cost and depreciation and every other thing-that could be taken into consideration, and you can safely rely on it. As to the cost of distribution, the Commission have not been authorized to enter into that. We have, however, as a matter of information in connection with these matters studied it somewhat, and I think that I can leave it in this way without quarrelling with pamphlets, or circulars, or newspaper articles-just this simple fact, the distribution of power in this city will reach large proportions, or it will remain small and therefore costly if the price is high. The thing is evident-when you talk about delivering four or five thousand horse power only, a large amount of it light, most of it small users, an enormous number of wires, etc., of course the cost will be high; but are you to imagine that a city of! this size, with the known custom, now existing, of sixty thousand horse power, including Toronto junction, is going to be satisfied to deliver only a small amount? The only rational method is to see that the distribution is carried out on a large scale to satisfy all the parties who require it, and if the City or Company take this matter up and does it on a large scale, it can be done cheaply and it can be done as cheaply as is indicated in our reports, therefore the whole question is, "Does the municipality desire to go into the business?"; for it is a business which cannot be undertaken lightly, it is a business, and if you go in you must consider that when you start you must go on with it as a business proposition, employ the right men, give them authority when you employ them, not hamper them, give them the money, and then you get the results; but if there is any half-heartedness about it, if certain municipal methods are employed, it will be a failure.

The distribution of electrical energy in a city is a great benefit. It is a natural monopoly. It should be done by one Company, and the only question in your mind to decide is, do you desire to use your financial strength and go into the business for the sake of having that distribution carried on more cheaply than a Company could carry it an? It is self-evident that a company is there to make money and that the city, if it had the business, would be there to make the city grow. Therefore, that is the way I would like to leave it with you to consider, that there is an unlimited source of electrical power at Niagara Falls, that the use of that power throughout this peninsula will maintain its industrial position, and I might say, if you do not use it, you will not maintain your industrial position. There are lots of towns and cities that are into the business, are going into the business, and they are going to have lots of electrical power for their manufactures, and they are going to get the manufacturers there if you do not get them here. I know of industries that are making preparations to move, based entirely on the fact that they are going to get the electric power, knowing that the city is going into the business of delivering electrical power to its manufacturers. They know they are going to get it at a reasonable price. They are going to build their factories as soon as the power is available. You have the financial strength, you can go into the business, you can make a success if you wish to, or you can leave it as it is.

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The Hydro-Electric Power Question


An historical review, leading up to the condition of the art or science of distributing electrical energy at the present moment. The main sources of power of value in commercial and industrial life. The use of fuel one hundred years ago as applied to the development of power by steam. A gradual perfecting of this method over the last 25 years. The steam engine perfected a long while ago. The development of water powers. The discovery, some 20 years ago, that electric power could be transmitted over a wire, in a commercial manner. The second stage of development, passing from the scientist to the sharp-witted financier. The importance of water power to the Province of Ontario. Our dependency on the United States for fuel. Horse power within the settled parts of the Province. Horse power available for present and future use. How this power can be augmented. An illustration. The use of electric energy for a city. Natural monopolies. Asking "Whose monopoly should it be?" The use of electric power and how it might be distributed. The Power Company of Hamilton. Dealing with peak load times. Learning from what other people in other parts of the world are doing: in Italy, Switzerland, France, Mexico, the United States, Africa. Development in Niagara Falls. The situation locally, from five years ago up to the present. The Canadian Niagara Power Company. The Ontario Power Company. Methods of transmission. The condition at the present time in Toronto. Cost of distribution. The great benefit of distribution of electrical energy in a city. The speaker, urging to the audience that the distribution of electrical energy is a natural monopoly; that it should be done by one Company, that the only question to decide is whether we should use financial strength and go into the business for the sake of having that distribution carried on more cheaply than a Company could carry it on. Asking that we consider that there is an unlimited source of electrical power at Niagara Falls, and that the use of that power throughout this peninsula will maintain its industrial position.