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the same number of gas consumers upon the systems of the Los Angeles Gas and Electric Corporation, Southern California Gas Company and Southern Counties Gas Company, as upon the combined systems of all other companies in the state. Gas sales upon these three systems are over 50 per cent greater than the combined sales for the balance of the state; gas revenue is approximately equal, and investment in companies' property is more than twice the combined investment for all other utilities in California.

It is apparent from these statements and the fact that peak winter day gas send-out for Los Angeles city exceeds the combined peak day send-out of all other parts of California, that gas operations in southern California have become a matter of much importance, justifying the constant attention in Los Angeles by the Commission's Gas Engineering Department.

In order to be prepared for the heavy demands, the Gas Utilities in the Los Angeles district have during the past several years expended vast amounts for enlargement of plant facilities. The gas generating plant of the Los Angeles Gas and Electric Corporation is now the largest oil gas manufacturing plant in the world, having a rated capacity of 95,000,000 cubic feet of oil gas per day. This output could be materially increased in an emergency, such as failure of the supply of natural gas which is mixed with the artificial gas for domestic consumption. The generating plant of the Southern California Gas Company has a capacity of 35,000,000 cubic feet per day. Gas storage facilities in the Los Angeles district amount to 40,000,000 cubic feet, with two additional 10,000,000 cubic feet holders now in course of construction.

Because of the increase in natural gas supply available to Los Angeles city, the Railroad Commission on April 1, 1923, informally ordered the Los Angeles Gas and Electric Corporation and Southern California Gas Company to increase the quality of mixed gas supplied for domestic purposes from 750 to 850 British thermal units per cubic foot. This increase in heating value was made without any change in rate and was therefore equivalent to a reduction in rates of approximately 12

per cent.

ELECTRIC DEVELOPMENT. The year just closed has seen definite accomplishments in the development of high tension transmission of electrical energy and in the increase in practical voltage of transmission. About twenty years ago an eastern manufacturing concern contracted with a California power company to furnish equipment for 44,000 volt transmission and agreed that if after a six months' experimental period, it was unable to make the equipment operate in a satisfactory manner at this voltage, it would rebuild it for operation at the highest voltage which was shown to be practical. During the past fiscal year, Southern California Edison Company has been actively engaged in the reconstruction of its Big Creek transmission system for operation at 220,000 volts and as this is written, the line is operating at such a voltage with better success than was met in the operation of the early lines at only one-fifth this voltage.

The result of the continual increase in transmission voltages during the past twenty years has been to reduce the cost of transmission lines and the loss of energy in them. Power is now transmitted to distances

there has been a continual widening of the field of development of our hydro-electric resources. The utilization of the extensive resources of the Pit River region and the transmission of its energy over 250 miles to the nearest available market, was accomplished during the year.

At the same time there have been extensions of the inter-connected transmission system, which now covers California and reaches into adjoining states.

The construction by The California-Oregon Power Company of a transmission line from its Copco plant in California to Springfield, Oregon, closes the principal gap between the Columbia River and the Mexican boundary line. Pacific Gas and Electric Company has completed preliminary arrangements for the construction of a transmission line to the summit of the Sierras east of Sacramento over which power will be exchanged with the Truckee River Power Company operating principally in the State of Nevada.

While but little energy is actually transmitted to great distances by means of the interconnection of these lines, they are of great value in making temporary surplus water power upon one system available upon some other system where there is a shortage. Not only does the interconnected transmission system distribute the benefits of the diversity in the time of maximum stream flow, but it results in a noticeable economy by permitting the construction of new plants in large units and almost eliminates the period of partial operation, which would be inevitable if such plants could be used only to meet the requirements of individual companies. The importance of this factor will be better realized when it is pointed out that the total generating capacity of the public utilities in the state is now close to one million horse-power and the annual growth, which for several years has averaged 8 per cent, demands the construction in each year of the equivalent of one power plant that but a few years ago would have been of record-breaking size.

In keeping pace with this increased demand for electricity, the electric utilities of the state have made substantial additions to their generating capacity. Pacific Gas and Electric Company placed in operation during the fiscal year its Pit River No. 1 plant of approximately 80,000 horsepower capacity; the San Joaquin Light and Power Corporation installed an additional unit of 20,000 horse-power in its natural gas-burning steam plant in the Midway oil fields, and The California-Oregon Power Company added a 15,000 horse-power generator to its Copco hydro-electric plant. Looking to the future, San Joaquin Light and Power Corporation has commenced preliminary survey and road work in connection with a development on the Kings River; Pacific Gas and Electric Company is actively engaged in tunnel work in its Pit River No. 3 development of 100,000 horse-power; the Great Western Power Company is preparing for the installation, early in 1924, of a 30,000 horse-power unit in its Caribou plant; Western States Gas and Electric Company is continuing work on its American River development, and Southern California Edison Company is carrying out work which will bring in about 125,000 horsepower of additional capacity in its Big Creek development before the close of the present calendar year.

CHAPTER X.

HYDRAULIC DIVISION. The work of the hydraulic division of the Engineering Department of the Commission, for the year ending June 30, 1923, has comprised investigations of and reports on rates, service, regulations and other matters relating to public utilities supplying water for domestic and irrigation purposes.

There are in excess of 550 public utility systems in the state which have filed their rates, rules and regulations with the Commission. These utilities range in size from those supplying a few persons to those which serve approximately 90,000 consumers, and the investment in these systems varies from a few thousand to in excess of forty million dollars.

During the twelve months' period decisions were rendered in 205 formal proceedings, and 146 formal matters were filed with the Commission. The work of the division also included the consideration and investigation of 479 informal complaints.

CLASSIFICATION OF DECISIONS. The following is a classification of formal proceedings involving water utilities decided during the year.

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CLASSIFICATION OF FORMAL PROCEEDINGS FILED. Formal proceedings filed during the fiscal year are classified as follows: Formal Applications: Rates

22 Transfers.

54 Securities

21 Certificates of public convenience. Discontinuance.

11 Contracts

1 Fixing just compensation.

2 Option.. Lease.

2

123 Formal Complaints: Service

13
Rates.
Investigation on commission's own motion.
Invasion of territory...

2

23

1

RATE PROCEEDINGS. During the past fiscal year the number of applications for increased rates has decreased, as compared with the applications filed during the previous year. This is probably due to the fact that many of the utilities have previously appeared before the Commission and have had their rate schedules adjusted to conform, to some extent, to the very material increases in the cost of maintenance, operation and construction. The indications at this time are that general reductions in the rates of water utilities cannot be made equitably until there is some decided reduction in the costs of material and labor. In a general way it may be stated that costs of operation and construction of water systems are fully 70 per cent higher than the corresponding costs in 1914 and 1915. Such rate increases as have been granted have not been so great as the increases in cost of operation and construction.

Among the larger rate proceedings decided during the year are included Natomas Water Company, Port Costa Water Company, Haines Canyon Water Company, Consolidated Water Company of Pomona and Cuyamaca Water Company.

Forty-seven proceedings involving applications for increased rates were decided during the fiscal year, in all of which the hydraulic division made complete investigation, appraisal and report.

An investigation on the Commission's own motion into the reasonableness of the rates of one of the larger water companies resulted in a decrease in the former rates of approximately 10 per cent.

VALUATION OF PROPERTY. During the course of the hydraulic division's investigations it is frequently necessary to make complete and extensive valuations of the properties of the utilities. A recapitulation of the valuations completed during the year shows that thirty-seven proceedings required appraisals ranging from $923 to $1,401,250. Eight of these appraisals showed a total in excess of $100,000, the average of the thirty-seven valuations being $164,635. The following tabulation shows the nature of the proceeding, the number of valuations and the amounts.

Number of valuations:

30
1
2
2
1
1.

Nature of

proceedings
Rates
Rates and service
Just compensation

Service
-Certificate
Securities

Amounts $4,007,314 00

53,636 00 1,457,750 00

4,508 00

923 00 567,480 00

Totals 37

$6,091,611 00

A complete statement is attached showing companies whose properties were appraised by the engineers of this division, setting forth in each individual case the valuations of property, application or case number, decision number and nature of proceeding.

TRANSFER OF PROPERTY. During the year fifty-four transfers of public utility water properties were authorized, of which thirteen were to municipalities, and five to water or irrigation districts.

There has been a decided tendency on the part of municipalities to acquire and operate public utility systems, and during this fiscal year

the cities of Napa, Watsonville, Ventura, Monterey Park and East San Diego acquired the public utility water systems which formerly supplied the citizens, and are now operating the plants.

DISCONTINUANCE OF SERVICE. Ten applications for authority to abandon public utility water service were decided during the year, eight of which were granted, one was dismissed at request of applicant and one was dismissed for lack of jurisdiction.

As applications of this nature are of great importance the Commission has insisted that the interests of consumers be protected fully and that the applicants thoroughly substantiate their claims before authority to discontinue is granted. The hydraulic division is invariably called upon for a complete report of conditions in proceedings of this nature.

INVESTIGATION ON COMMISSION'S OWN MOTION. In some instances it has been necessary for the Commission to initiate an investigation on its own motion into the rates, rules, practices or service of various water utilities, and in connection with these proceedings engineers from this division have made extensive investigations and reports on the matters in controversy.

During the fiscal year decisions have been rendered in five proceedings initiated on the Commission's own motion.

CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY. Owing to the rapid growth of the state new water systems are being constructed to supply consumers located upon subdivisions and tracts opened for sale and settlement. Certificates of public convenience and necessity are required before these systems can operate as public utilities.

Ten certificates were granted during the fiscal year in each of which the engineers of this division made investigation and report.

FIXING JUST COMPENSATION FOR PUBLIC UTILITY PROPERTY. During the fiscal year the hydraulic division has been called upon to make investigations, inventories, appraisals and reports upon two public utility water systems which municipalities have desired to acquire under eminent domain proceedings or otherwise.

These investigations and appraisals require exceptional accuracy and care in order to avoid a reversal of the Commission's findings of just compensation in the Supreme Court. It may be noted that in the only proceeding of this character taken to the Supreme Court the Commission's finding was sustained.

INADEQUATE SERVICE. The engineers of the hydraulic division are frequently called upon to investigate matters relating to formal complaints of inadequate service rendered by water utilities, and to make recommendations as to the best methods of improving conditions.

Decisions were rendered in twenty-three formal proceedings involving service matters in each of which an investigation and report were required.

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