C. L. 147]

base figure to use in this proceeding is $13,980, segregated into its various accounts, as follows:

The plans now contemplated by Mr. Cookingham do not provide for a telephone booth for a public pay station in Laguna Beach and, as such a booth appears necessary, the cost of the same has been included in the rate base. The above figures are also based on the assumption that there will be connected, after operations are commenced, approximately 40 subscribers, and that within the coming year, if proper service be rendered, this figure will be increased to at least 90 full-year subscribers. During the summer months this figure will probably be considerably increased.

Reasonable operating expenses, including taxes, required in the operation of this system should not exceed $3,998 per year. A segregation of this amount into the various accounts is as follows:

A reasonable amount for depreciation for these properties is an amount of $460 per year, and this added to the

above allowance for operating expenses makes a total annual expense of $4,458.

Under the existing conditions, we believe that if this application shall be granted by supplemental order herein as above mentioned, applicant would be entitled to earn 8 per cent. upon the rate base herein found. The total revenue which will be required to cover operating expenses, depreciation and this interest upon investment would then amount to $5,576.

In his application, E. H. Cookingham proposed certain rates which he desired be made effective. These rates which applicant proposes are considerably in excess of the rates now in effect by other utilities serving towns similar in size to Laguna Beach and, if applied to the proposed business, would result in a return of approximately 12 per cent.

At present, and in accordance with the toll rates of The Yoch Company now on file with this Commission, a charge of 25 cents is collected from any party in Laguna Beach for each incoming call received or outgoing call made. It is proposed that this rate be eliminated and that the toll rate between Laguna Beach and other points be based upon air line distance. This change is reasonable and, if made, will eliminate the difficulty now experienced and, in addition, will place the toll service to Laguna Beach on the same basis now in effect throughout practically the entire State.

The rates which will result in a reasonable return to the applicant and which, in our opinion, would be just and reasonable rates under the conditions and operations which appear will exist in Laguna Beach, are those as set forth in Exhibit A attached to the order of this decision. These rates will be slightly higher than rates of other utilities serving towns of approximately the same size as Laguna Beach, primarily, on account of the large amount

[Cal.

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of distribution system required in relation to the number of subscribers to be served.

ORDER.

E. H. Cookingham, doing business under the name and style of Laguna Beach Telephone Company, and The Yoch Company having requested this Commission for an order authorizing the transfer of the toll telephone system, as described in the application, from The Yoch Company to E. H. Cookingham; and E. H. Cookingham having requested an order granting him a certificate that public convenience and necessity require the establishment and operation of a local telephone exchange system in Laguna Beach, and vicinity; the board of supervisors of Orange County having granted E. H. Cookingham the right and privilege of carrying on a general telephone business within Orange County; a public hearing having been held in the above-entitled proceeding; the matter having been submitted and now being ready for decision,

It is, hereby ordered, That The Yoch Company be, and it is hereby, authorized to sell, and that E. H. Cookingham be, and he is hereby, authorized to purchase, for the price stated in the application, the toll telephone system of The Yoch Company, located in Laguna Beach and extending to the town of Tustin, more particularly described in the application in this proceeding; provided, that The Yoch Company and E. H. Cookingham file with this Commission on or before March 9, 1924,

(1) A certified copy of all documents of transfer covering the property involved.

(2) A stipulation declaring that E. H. Cookingham, his successors and assigns, will never, in any proceeding before the Railroad Commission or any other public authority, claim any value for any franchises or permits acquired from The Yoch Company in excess of the amount paid for such franchises or permits to the public authority granting the same, which amount shall be specified in such stipulation.

(3) A stipulation declaring that the consideration for which the public utility properties are herein authorized to be transferred need not be considered as a measure of the value of said properties for any purpose other than the transfer herein authorized; and

The Railroad Commission hereby declares that it is its present opinion that public convenience and necessity require the construction and operation of a local exchange telephone system at Laguna Beach similar in type to the system described in the application herein, and the rendering therefrom of an adequate telephone service within the town of Laguna Beach, and vicinity, and

The Railroad Commission further declares that if, within thirty days after the effective date of this order, E. H. Cookingham shall satisfy this Commission that he has (1) Refunded all moneys which he may have collected for local exchange service at Laguna Beach, up to said effective date of this order, or (2) If any such moneys cannot be so refunded prior to that time on account of inability to find the person or persons who may have paid the same, that E. H. Cookingham has deposited any and all such moneys with some bank or individual, approved by this Commission, subject to payment to such persons if and when located, and, in that event,

this Commission will consider and determine, by supplemental order herein, what may be the proper disposition of this application of said E. H. Cookingham; and

The Railroad Commission hereby specifically reserves the right and authority, by supplemental order herein, to reopen this proceeding and to make such other and further disposition thereof as may appear necessary or proper. The effective date of this order shall be February 25, 1924.

The foregoing opinion and order is hereby approved and ordered filed as the opinion and order of the Railroad Commission of the State of California.

Dated at San Francisco, California, this eighth day of February, 1924.

[Cal.

primary rate area.

Rate:

Applicable to individual and party line flat rate service within the

Grade of Service

Individual line station

Two-party line station

For individual or party line service outside the primary rate area, see mileage rates, Schedule No. A-4.

SCHEDULE No. A-4-EXCHANGE SERVICE.

Mileage Rates:

Applicable to general service outside the primary rate area.

The charges for service given above are in addition to the regular flat rate charges.

By supplemental order issued February 25, 1924, the Commission found that applicant had complied with the recommendations of the previous order relative to the refund of moneys collected from prospective subscribers, and finally approved the certificate of convenience and necessity, and authorized the collection of the rates and charges in the original order set forth.