Consideration to be given to, in determining reasonableness of elec-
tric rates, see RATES, 30.
REASONABLENSS.
Of rates generally, see RATES.
Of return, see RETURN.
Burden of proof as to reasonableness of rates, see EVIDENCE, 2-4.
Presumptions as to reasonableness of rates, see EVIDENCE, 1.
Of plant as purpose of security issue, see SECURITY ISSUES, 8, 9.
Power of Interstate Commerce Commission to inspect records of
carriers, see INTERSTATE COMMERCE COMMISSION, 1-3.
1. The destruction of books of predecessor utilities by or under
the authority of officials long enough in the service to know their
value justifies the conclusion that it was done for the purpose of avoid-
ing a public revelation of their contents, particularly where it appears
that without such books it is impossible to determine the original cost
of the companies' properties and the exact sums advanced by the prin
cipal stockholder and bondholder of the companies, for which reim-
bursement was later made to him by issues of bonds. Re Los Angeles
R. Corp. (Cal.) 297.
2. The Commission authorized two telephone companies to keep
their books, records, papers, and accounts outside of the state of Illi
nois, where it appeared that greater efficiency and economy would re-
sult therefrom, upon condition, however, that the same should be pro-
duced at any place within the state and at any time requested by the
Commission, and that the Commission, its officers, or agents would be
permitted to inspect at any time. Re Kinloch-Bloomington Teleph. Co.
(Ill.) 348.
As discrimination, see DISCRIMINATION, 3-17.
As ground for admitting competition in a field already occupied,
see MONOPOLY AND COMPETITION, 3.
Of excessive charges, see REPARATION.
Of lawful obligation as purpose of security issues, see SECURITY
ISSUES, 10-13.
REGRESSIVE.
Elimination of regressive features in determining percentage of
active horse power of electric utility, see ELECTRICITY, 3.
Regressive step-meter rates as discriminatory, see DISCRIMINATION,
19.
Reversal of judgment to permit of partial, see APPEAL AND REVIEW,
2.
By mandamus, see MANDAMUS.
1. A refund from the charges of an electric light company for past
services, made under its lawful schedule on file with the Commission,
will not be granted to consumers even though such charges are found
to have been excessive. Charlesworth v. Omro Electric Light Co. (Wis.)
1.
2. A water company is under no legal obligation to rebate a por-
tion of its charges when a leak has occurred upon the premises of a
consumer. Austin v. Hackensack Water Co. (N. J.) 423.
3. Reparation for the payment of the fee charged by a water com-
pany for making a service connection will not be authorized, where
it appears that the practice of charging for such connection has been
voluntarily discontinued at the suggestion of the Commission, and
where the connection at the time made was authorized by ordinance.
Nickerson v. People's Water Co. (Cal.) 25.
4. A complaint by a consumer against a water company, alleging
error in a quarterly bill, was dismissed on condition that a rebate
recommended by the Commission's inspector for fast meter be made
by the water company, where the inspector, upon examination of the
consumer's premises, found that the high bill was mainly due to
leaks on the premises, but also found the meter to be fast. Austin v.
Hackensack Water Co. (N. J.) 423.
5. A telephone company was ordered to adopt a rule providing for
refunds of rentals for the full months of the unexpired time paid in
advance by subscribers not owning their own telephone equipment who
desire to discontinue any service, and who shall have been patrons one
year or more. Re Sabetha Mut. Teleph. Co. (Kan.) 507.
6. A telephone company was ordered to adopt a rule providing for
refunds of switching fees for the full unexpired time paid in advance
by subscribers owning their own equipment who desire to discontinue
any service. Re Sabetha Mut. Teleph. Co. (Kan.) 507.
Review of judgment refusing mandamus requiring carriers to per-
mit inspection of, see APPEAL AND REVIEW, 2, 3.
REPRODUCTION COST.
Definition of, see VALUATION, 5.
REPRODUCTION COST LESS DEPRECIATION.
Definition of, see VALUATION, 6.
Rates for telephones, see RATES, 73, 74.
Four party line telephone service for residence, see SERVICE, 46.
RETROACTIVE.
See STATUTES, 1.
II. Return to which utility is entitled, 8–12.
a. In general, 8-11.
b. Municipal plant, 12.
III. What expenses allowable, 13–22.
a. Operating expenses generally, 13-19.
b. Interest, 20.
c. Taxes, 21.
d. Claims for damages, 22.
IV. Particular amounts considered, 23–35.
Accrued depreciation as an operating expense, see DEPRECIATION, 15.
Sufficiency of evidence to show that passenger train service is not.
profitable, see EVIDENCE, 6, 7.
1. For the purpose of comparison of railroad accounts, the soundest
basis is found in the net operating revenue, for the reason that extrav
agant or imprudent management is revealed mainly in the companies'
capital expenditures, leases of other lines, or investments in the
securities of other companies, such transactions affecting the amount
of the net corporate income, but exercising but little influence upon the
net operating revenue. Railroad Passenger Rate Case (Mass.) 362.
2. Normal consumption, rather than a consumption which is possi-
ble but improbable, should be the consumption accepted in fixing the
return that should be assured to an electric light company which is
ordered to extend and furnish service to a residence located some dis-
tance away from the main streets of a community. Tieman v. Public
Service Electric Co. (N. J.) 674.
3. A deficit appearing in the balance sheet of an electric light com-
pany may not exist, and a depreciation reserve liability may be fully
covered by assets, where the book value is understated because of the
fact that construction has been paid for out of earnings not charged
to the plant account. Charlesworth v. Omro Electric Light Co. (Wis.)
4. The advancing ratio of railroad maintenance expenses to operat-
ing revenues, whether due to the failure of the companies to make
adequate provision for maintenance in the past, or to the remarkable
railroad development of late years, requiring enormous expenditures
for larger and heavier equipment, was not disregarded in a determina-
tion of the reasonableness of proposed changes in passenger fares, al-
though it was contended that the railroads, in order to make a favor-
able showing for an increase in rates, had buried their net earnings,
by charging maintenance expenses, not only with all the necessary
cost of maintenance, but also with the cost of many new additions
which properly belonged to new construction, and represented a
capital, rather than an operating expense; it being recognized that a
considerable part of the cost of needed railroad construction and re-
newals cannot be capitalized, but must, in the absence of an adequate
reserve for depreciation, be charged to operating expenses. Railroad
Passenger Rate Case (Mass.) 362.
5. The capacity expenses of a water plant are those which do not
change to any great extent with increase or decrease of the amount of
water pumped, but are influenced by the capacity of the plant and the
demands upon it. Beloit v. Beloit Water, Gas, & Electric Co. (Wis.)
6. The output expenses of a water plant are those directly depend-
ent upon the amount of water pumped. Beloit v. Beloit Water, Gas &
Electric Co. (Wis.) 1005.
Amortization of expenses.
7. An expense item of $3,000 incurred by a municipal electric plant
through damage to a flume resulting from high water was ordered to
be amortized and written off in sums of not more than $500 a year. Re
Brodhead Municipal Electric Utility (Wis.) 524.
II. Return to which utility is entitled.
8. A utility is entitled to earn the whole cost of rendering the serv-
ice and in addition thereto a reasonable return on the fair value of
the property actually used and useful for the convenience of the public.
Re Terminal Taxicab Co. (D. C.) 546.
9. An electric light and power company is entitled to an adequate
return, but while it may choose between profits and a high operating
cost, yet it may not impose upon the public a combination of the two
which is unreasonably high. Milford Electric Petitions (Mass.) 577.
10. A railroad company should be permitted to earn a fair return
upon its outstanding capital stock, where it appears that its stock
transactions have tended to under, rather than over capitalization, and
that the company is not over capitalized. Railroad Passenger Rate
Case (Mass.) 362.
11. After a valuation of a street railway company's property an
increase in rates will be ordered if the present rates are not sufficient
to enable the company to provide adequate service and at the same
time yield a reasonable return upon the investment. Public Service
Commission v. Puget Sound Traction, Light & P. Co. (Wash.) 799.
12. A municipal electric plant should be permitted to earn more than
enough to pay interest on outstanding bonds if the city so desires,
particularly where the rates being charged are comparatively low, and
such excess earnings arising from increasing the rates may be used for
any purpose the city sees fit. Re Brodhead Municipal Electric Utility
(Wis.) 524.
III. What expenses allowable.
a. Operating expenses, generally.
13. In a proceeding to fix the rates of an electric light company,
capital expenditures improperly charged to operating expenses in the
company's income accounts cannot be considered as a part of the rea-
sonable operating expenses of such company, particularly where the
Commission in fixing the fair value of the company's properties holds
that the company should not be limited to the book value shown on its
books, because of the fact that such expenditures had not been included
therein. Charlesworth v. Omro Electric Light Co. (Wis.) 1.
14. In arriving at an estimate of the reasonable operating expenses
of an electric light company, a comparison of the expenses of the com-
pany's business with the expenses of other similar utilities furnishes
important evidence in reaching a conclusion, although such comparison
does not reveal to what extent the difference in operating cost is in-
fluenced by wages and salaries, improper allocation of expenditures for
operation and construction, and inefficiency arising from a difference
in the station load and engine capacity. Charlesworth v. Omro Elec-
tric Light Co. (Wis.) 1.
15. It was recognized in an investigation of railroad rates that
proper development of railroad service and facilities would be arrested,
and needed improvements retarded, if maintenance expenses, although
relatively large as compared with former years, should be materially
reduced. Railroad Passenger Rate Case (Mass.) 362.
16. The theory that all operating expenses of an electric light and
power company (exclusive of cost of electricity purchased), and interest
and dividend charges, must be shared proportionately by its customers.
regardless of the amount of electricity which each uses or of the con-
ditions under which it is used, is unsound, and its application would
prove an effective check to the development of the company's business.
Milford Electric Petitions (Mass.) 577.
17. Unusually high wages and salaries must be considered partially
as a disposition of net income, unless they result in greater efficiency
and consequent reduction of expenses in other directions. Charles-
worth v. Omro Electric Light Co. (Wis.) 1.
18. An allowance of $2,823 was made for wages, salaries, and mate-
|