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Interstate Commerce Commission of the proposed Southern PacificCentral Pacific unmerger. This matter is of vital importance to California. The Commission and the chief engineer of the Commission, who was fully familiar with the conditions, took an active part in the hearings.

CONSOLIDATION OF RAILROADS. During the year the Interstate Commerce Commission held in California, at the urge of the Railroad Commission and other bodies, hearings on the question of the proposed consolidation of steam railroads. A careful analysis of the various plans was made by the Commission's chief engineer and the transportation engineer relative to the effect of the suggested plans, and recommendations were submitted setting forth their ideas as to the consolidations which would result to the best interest of California.

VALUATION OF RAILROADS. In so far as men were available work has been carried on in connection with the valuation of steam railroads by the Interstate Commerce Commission. Tentative valuations as received have been gone over and the Interstate Commerce Commission advised at the proper time of such modifications and changes as it appears should be made.

LOS ANGELES STREET RAILWAY SITUATION. A very important activity in connection with transportation properties now under way is the valuation and survey of the Los Angeles Railway and Pacific Electric Railway in the city of Los Angeles. The transportation situation of Los Angeles has presented important problems and, at the recommendation of this Commission, a cooperative survey is being carried on by the companies, the Commission, and the Board of Public Utilities of Los Angeles into the transportation situation. Valuations are being prepared of the street railway system properties within the city and a number of men are directly assigned to this work.

VALUATIONS. Valuations made and completed during the year by the Engineering Department, not referred to specifically under the various divisions, include the following: Midland Counties Public Service Corporation's electric properties, Application No. 5535, historical reproduction cost operative property $2,054,479; Western States Gas and Electric Company, Application No. 6886, historical reproduction cost electric properties as of December 31, 1921, operative property $5,361,160; historical reproduction cost gas properties, operative property $2,005,514; Southern California Gas Company, Case No. 1776, historical reproduction cost gas properties, San Bernardino, Riverside, Redlands and Corona, operative property $2,405,540; Coast Counties Gas and Electric Company, Case No. 1851, electric properties as of December 31, 1922, operative property $2,025,318. These valuations have been presented in evidence in proceedings which up to the present time have not been decided.

MISCELLANEOUS ACTIVITIES. Other activities of the Engineering Department which are not a part of the general formal or informal routine work of the department consists of assisting different groups of the public in connection with various

in the assistance of the Nevada Irrigation District to obtain a satisfactory agreement with the Pacific Gas and Electric Company for the sale of the use of water for power purposes in connection with the development of that district. A great deal of work has been done in connection with this matter and it appears that the outcome will be a satisfactory settlement whereby the district may develop its irrigation project.

It had been hoped during the year that considerable additional inspection of utility service would be instituted for the benefit of large developments to insure economy and efficiency in the service rendered the public and to insure the adequacy of the same. Unfortunately it does not appear that it will be possible to commence this work on account of curtailment of funds.

In the following four chapters is set forth more in detail the activities of the Engineering Department as shown by the work in the various divisions.

CHAPTER IX.

GAS AND ELECTRIC DIVISION. The gas and electric division activities during the last year have been in a general way similar to those of previous years, covering the technical investigation connected with the formal proceedings involving gas, electric and steam heat utilities, the inspection of gas service and of overhead electric line construction and a number of special investigations into service conditions. During the year changes in the organization of the entire Engineering Department have resulted in the transfer of the problems of inductive interference between power and communication lines to the telephone division.

The year has seen a continuation of the downward tendency in rates for both gas and electricity that was noticeable during the previous year. This has been due in part to a continued decline in the prices of various materials, particularly of fuel oil, and in part to the effect of other more permanent influences. The growth of the various utility companies is having an important effect in the reduction of costs of operation because it is accompanied by a greater congestion of business and more intensive utilization of existing facilities, as well as because of the relatively lower cost of construction and operation of the larger units made possible. The continued use of plant facilities constructed under pre-war conditions has been an important factor in keeping down the cost of utility service. As the prices of labor and material are now well above pre-war levels each extension of service or addition to plant capacity tends to increase the relative proportion of higher priced plant facilities involved in the various services; and, in the case of the electric utilities, it must be remembered that the cheaper hydro-electric projects were the first ones to be constructed and as time goes on more inaccessible and less easily developed resources must be utilized. There are thus two distinct and opposite tendencies which will affect the future rates for gas and electric service and it is indeed difficult to predict at the present time how much further the prices of these commodities may be expected to decline.

During the year the average price of gas in the state has been reduced to approximately the pre-war level. The accompanying table shows the sum of the gross gas revenues and sales of all California utilities with the exception of the Midway Gas Company, which does a wholesale business in natural gas.

Average

GAS RATES.

Year
1916.
1917,
1919.
1920.
1021.
1922
Fiscal year 1922-1923, estimated.

M. cu. ft.
gas sales
22,53 3,581
29.019,841
31,143,869
34,241,251
42,267,513
57,849.291

Gross
revenue
$14,831,215
16,878,211
19,998,131
27,123,689
32,252,205
37,223,979

rate per thousand

65.8 58.2 58.0 80.1 76.3 64.3 59.0

RATE REDUCTIONS. A great increase in the production of natural gas and material decreases

form of gas rate which varies automatically with the price of oil, adopted by the Commission in 1921, has aided materially in changing the rates of those utilities serving manufactured gas. Two general oil price reductions totaling fifty cents per barrel occurred during the year and consumers were receiving the benefit in lower gas rates within thirty days thereafter. The rate reductions thus put into effect without the necessity of hearings or legal process amounted to over $2,100,000 in annual gas bills and affected some 632,000 families.

In connection with the general reduction in the level of rates, it is gratifying to note a continued improvement in both gas and electric service. This is in part due to development in the arts and to increased recognition of the importance and value of good service and, to a large extent, in the continued search for and improvement of weaknesses which developed during the period of increasing demands and scarcity of labor and material following the war. It is distinctly noticeable that the complaints regarding service reaching the Commission are becoming fewer and the correction of the unsatisfactory conditions more readily accomplished.

STANDARDIZATION OF GAS SERVICE. Important progress was made during the year in the enforcement of General Order No. 58 and the standardization of gas service throughout the state. On April 1, 1923, a revision of the Commission's General Order No. 58 became effective. The revised order sets forth in somewhat greater detail the standards which the Commission believes requisite for good gas service.

The most important change in its provisions is the reduction of the standard heating value for manufactured gas from the former 570 B. t. u. average to an average of 550 B. t. u. based upon daily tests made of an average sample of gas. In addition to this daily average sample test, three tests a day are required to determine the variations from the average. This new heating value standard follows the recommendation of the Joint Committee on Efficiency and Economy of Gas and is based upon three years' practical study as to the most efficient and economical heating value standard applicable to California conditions.

There is a marked tendency in the state toward a centralization of gas plants in large units situated at strategic points and the construction of transmission lines therefrom, operated at high pressures, to serve the surrounding territory. The Pacific Gas and Electric Company have under construction a transmission line from San Rafael to Santa Rosa, a distance of 40 miles, with the ultimate purpose of dismantling the Santa Rosa plant. The Woodland and Los Gatos plants have already been discontinued, gas being supplied from Sacramento and San Jose. A transmission line is nearing completion connecting San Francisco and San Jose, serving the thickly populated peninsula territory. Central Counties Gas Company serves five growing municipalities from its central plant at Visalia; Riverbend Gas and Water Company serves four cities from Dinuba, and Coast Counties Gas and Electric Company, five from its Pittsburg plant. The intervening rural territory is, in all these instances, greatly benefited by the convenience of gas service.

The revised order takes cognizance of the drop in heating value due to the compression of gas and contains special provision permitting

the Commission to take suitable action in case this becomes sufficiently serious to affect service.

To accompany this revised order the Commission's engineering department has prepared a gas service bulletin in explanation of the rules and containing much useful information concerning the records a gas utility is required to maintain and the service it is expected to render. The usefulness of this bulletin is evinced by the fact that some 900 copies have already been distributed. Requests for copies have been received from some twenty states and four foreign countries.

During the year seventy-five gas service inspections were made by the engineers engaged in this work and the reports made thereon show a steady improvement in the service rendered to consumers. The general purpose of these inspections is to ascertain whether gas consumers are receiving a service commensurate with the rates charged, and to check all records and testing equipment in order to make sure that the records maintained reflect actual operation conditions.

JOINT COMMITTEE ON EFFICIENCY AND ECONOMY OF GAS. The field work of the Joint Committee on Efficiency and Economy of Gas was completed during the year and the preparation of its final report is now in progress.

The results obtained by this committee have been most satisfactory and the two progress reports issued by it have caused widespread comment. Its recommendations concerning the most economical and efficient heating value for oil gas were followed by the Commission in its revised General Order No. 58. So useful has the work of this committee been that the utilities concerned, in conjunction with the Railroad Commission, have determined to reorganize it into a permanent organization known as The California Gas Research Council. The purpose of the Council is to coordinate the research activities of California gas utilities into a concerted effort to study means for the improvement of the art of gas manufacture, distribution and utilization.

The constitution of the council provides that its chairman shall be a member of the staff of the Commission and in addition to its company membership an engineer has been employed, qualified to supervise and conduct intensive research investigations.

LINE INSPECTION. The inspection of electric line construction facilities as to compliance with the provisions of chapter 499, Statutes of 1911, as amended by chapter 600, Statutes of 1915, an act regulating the placing, erection, use and maintenance of electric poles, wires, cables and appliances has now been carried on by the Commission for over a year.

Three inspectors in the field have covered the largest part of the state, inspecting not only lines of electric utilities but of cities, private companies and individuals. Approximately 75,000 miles have been traveled to date. The hazard to workmen and the public being largely on the higher voltage lines, the inspection work has been confined so far to power and electric transportation lines. No effort has yet been made to inspect telephone or telegraph facilities except where same are in hazardous proximity to power or traction lines.

During the period of inspection thirty-three utilities, forty-five cities

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