Public Service Commission. In re PETITION OF THE MONON TELEPHONE COMPANY FOR AUTHORITY TO INCREASE RATES. No. 7063. Decided February 1, 1924. Former Order Amended Abolishing Rates for Grounded Service. MODIFIED ORDER No. 2. On November 23, 1923, the Commission approved its original order* in this cause fixing rates for telephone service in Monon and the vicinity thereof. On December 28, 1923, a modified ordert was entered making certain corrections. In the rates heretofore fixed, a rate was fixed for grounded service in the town of Monon and it was the anticipation of the Commission that grounded service would be done away with in the near future and that all lines should be made full metallic. The Commission, therefore, is of the opinion that a rate for grounded service should not be included in petitioner's rate schedule. It is, therefore, ordered by the Public Service Commission of Indiana, That the Monon Telephone Company shall discontinue and abolish any specific rate for grounded telephone service in the town of Monon and shall charge for such service its published rate for residence service. It is further ordered, That petitioner shall proceed in accordance with the statements rendered to the Commission to rehabilitate its plant and system, and shall on or before June 1, 1924, replace all grounded circuits by metallic circuits and shall report to the Commission every thirty days the progress of the work of rehabilitation. February 1, 1924. See Commission Leaflet No. 146, p. 303. In re PETITION OF THE WHITESTOWN CITIZENS TELEPHONE COMPANY FOR AUTHORITY TO INCREASE RATES. No. 7414. Decided February 1, 1924. Increase in Rates as Requested Authorized -Amount Ordered Set Aside Annually for Depreciation Charges. OPINION AND ORDER. On November 28, 1923, the Whitestown Citizens Telephone Company filed a petition with the Commission alleging in substance, that petitioner is a public utility engaged in operating a telephone exchange property in the town of Whitestown, Indiana, and in the rural territory adjacent thereto; that since the tenth day of November, 1919, a schedule of rates has been in effect under which the petitioner's income has been insufficient to pay operating expenses, including depreciation, and to earn a fair return on the value of its property; and that without such return petitioner will be unable to obtain additional capital with which to extend its lines to satisfy the normal demand for telephone service. The petitioner asks that it be authorized to put into effect a schedule of rates set out in the petition. At the hearing hereinafter mentioned, the petitioner amended its complaint by making certain changes in the proposed schedule of rates. The proposed schedule as amended reads as follows: Individual or party line, business.. Extensions Rural party, business.. Individual, residence Party, residence (not more than four parties on line).. Rural party line. Extensions Per Month $1.50 35 125 125 125 1 10 35 All rents and tolls to be paid in advance, on or before the tenth day of each month. For desk telephones, 25 cents per month in addition to the above rates. [Ind C. L. 148] After due notice to interested parties, a hearing was held at Whitestown, Indiana, on January 30, 1924. The evidence introduced at this hearing shows that petitioner has 482 subscriber stations, of which 478 are revenue producing. Its subscribers enjoy free service to a large number of other towns and cities, including Zionsville, Lebanon, Advance, Jamestown, Big Springs, Elizaville, Mechanicsburg, Thorntown, Hazelrigg and New Bruns wick. Petitioner's rates now in effect are discriminatory in the extreme. The rate for subscribers of all classes is $12.00 per annum. Individual business service produces no greater revenue than party line residence service. These rates have proven inadequate and, as a consequence, petitioner's lines are in bad condition and the service is becoming impaired. An audit prepared by the accounting department of the Commission for the period from January 1, 1921, to December 31, 1923, was introduced in evidence. It appears from this audit that the system of accounts required by the Commission has not been placed in effect by petitioner. The audit shows further that in 1921 petitioner's total receipts were $6,682.05, its total expenditures $6,269.80, and its net receipts $412.25; in 1922, its total receipts were $6,429.76, its total expenditures $6,912.77, leaving a deficit of $483.01; in 1923, the receipts were $6,400.93, the expenditures $5,824.44, and the net receipts $576.49. Petitioner's expenses have been small, the total pay-roll in effect on December 31, 1923, being as follows: Both from the audit and from other evidence introduced at the hearing, it appears that petitioner has been unable to set aside a depreciation reserve and that there are, therefore, no funds available for the necessary repairs and the rehabilitation of the plant, the necessity for which is now confronting the company. From the evidence it appears that the value of petitioner's plant is approximately $20,000 and the value of its depreciable property approximately $18,500. If petitioner be authorized to place in effect the rates requested in the petition, its annual revenue will be increased approximately $825. Taking the year 1923 as an example, petitioner's net receipts on the requested schedule would be about $1,400. Since petitioner has not been setting aside any portion of its revenues for depreciation however, it is fairly inferable that some of the expenditures were made for purposes that should properly have been taken care of from the depreciation reserve account. Assuming that the operating expenses would have been reduced some $500 if proper accounting methods had been employed, the amount available for depreciation and return in 1923 would have been $1,076.49, and if the requested rates had been in effect, this amount would have been about $1,900. Were petitioner required to set aside 5 per cent. of the value of its depreciable property for depreciation, there would be available about $975 for return on the fair value of petitioner's property. It would appear, therefore, that the rates requested are certainly not unreasonable, since the return even upon the assumption above outlined would be less than 5 per cent. The Commission, being advised in the premises, is of the opinion, and finds, that the present schedule of rates of the Whitestown Citizens Telephone Company is inadequate, unjust and unreasonable, that the schedule hereinafter authorized is reasonable and just, and that the same should be authorized, effective April 1, 1924, [Ind. C. L. 148] The Commission further finds that the Whitestown Citizens Telephone Company should be ordered and directed to install the system of accounts required by the Commission for companies of its class and character. It is, therefore, ordered by the Public Service Commission of Indiana, That the Whitestown Citizens Telephone Company be, and it is, authorized and directed to charge and collect the following schedule of rates for telephone service, effective April 1, 1924: Desk telephones, 25 cents per month in addition to above rates. All rents are payable in advance, and must be paid on or before the tenth day of the month in which the service is rendered. It is further ordered, That the Whitestown Citizens Telephone Company shall proceed immediately to install the system of accounts required by the Commission for companies of its class and character. It is further ordered, That the Whitestown Citizens Telephone Company shall set aside annually for depreciation 5 per cent. of the value of its depreciable property, which value is found to be $18,500. It is further ordered, That on or before April 1, 1924, the petitioner shall file with the tariff department of this Commission and shall post and keep posted in its office in full view of the public during the entire time such schedule is in effect a printed or typewritten copy of its schedule of rates as hereinbefore authorized as required by Sections 41-47 of the Public Service Commission Act. |