[U.-1674]

IN RE APPLICATION OF THE WISCONSIN GAS AND ELECTRIC COMPANY WITH REFERENCE TO DISCONTINUANCE OF HEATING SERVICE AT KENOSHA, AND FOR AN INCREASE IN RATES UP TO THE TIME OF SUCH DISCONTINUANCE

Decided May 24, 1920

Application for authority to abandon heating service at Kenosha, granted, due to the small demand for such service, the inadequacy of applicant's plant to furnish reasonable service, and the high cost and large necessary investment involved in rebuilding the plant so as to furnish adequate service; a request for authority to increase heating rates until the service was discontinued, denied.

1. Service-Abandonment by Utilities-Authorization

Great caution should be exercised by the Commission in considering authorization for the abandonment of service by a public utility, since a utility is in duty bound to continue the operation of its property so long as it is practicable to do so.

2. Heating Utilities-Abandonment of Service-When Justified

Where a heating utility desires to abandon service, and where its plant is wholly inadequate, due to deterioration and lack of capacity to furnish acceptable service, and where the demand for service is comparatively small, it may reasonably be authorized to abandon such service even though such abandonment will result in great inconvenience to present patrons.

This petition was filed August 23, 1919. The prayer of the petition is as follows:

"That the Commission resume and conclude the investigation of petitioner's Kenosha heating plant instituted in the spring of 1917 and declare the result of its observation, as referred to in its decision of September 6, 1917, hereinbefore quoted, with reference to the condition of said plant and the course which must be pursued with reference thereto.

That the Commission recognize the necessity for abandonment of petitioner's heating plant not later than the close of the heating season of 1919-20, and at such earlier date, preferably January 1, 1920, as may be found to be reasonable, and make such provisions and recommendations as may be proper for enabling petitioner's heating customers to change to other methods of heating their premises with the minimum of delay, expense and inconvenience.

"That the Commission authorize petitioner to increase its heating rates in the city of Kenosha, for the season of 1919-20, or such portion thereof as the heating utility may

be operated, to not less than 70 cents per square foot of radiation required for the heating season, or a proportionate part thereof in case the plant is not operated during the entire season."

A numerously signed petition was also filed with the Commission asking, in substance, that the Wisconsin Gas and Electric Company be required to repair and rebuild its heating system and continue to serve its patrons indefinitely, and that the rates effective in 1918-1919 be reduced.

A hearing was held at Kenosha on October 6, 1919. Van Dyke, Shaw, Muskat & Van Dyke, by Ralph M. Hoyt, appeared for the applicant, John C. Slater for the city of Kenosha, George Taylor for Mr. Meis, the proprietor of the Virginia Theater, and Chester D. Barnes in his own behalf.

A preliminary order was issued on October 18, 1919, denying an increase in rates and giving the company authority to continue the 44-cent rate which was in effect last season.

The substance of this petition has been before the Commission in several different forms, and very thorough and pains-taking investigations have been made of the whole situation.

[1] Great caution should be exercised by the Commission in the consideration of the abandonment of any kind of service being rendered by a public utility. This is particularly true in the present instance, on account of the great inconvenience which would be caused present patrons and on account of the inherent obligation which attaches to a public utility which has undertaken such duties as are involved in delivering heat to the public. The Commission is of the opinion that any utility is in duty bound to continue the operation of its property so long as it is practicable to do so.

This utility has had as many as about ninety patrons, and served a maximum of about 80,773 square feet of radiation. The number of customers became reduced to 61 on September 18, 1919, and the amount of radiation served to 61,051 square feet (Petitioner's Exhibit 1,-October 6, 1919).

[2] The records in this and previous cases involving this utility, show that for several years the company has refused new applications for heating service and discouraged patronage; that in a number of instances the service became very inadequate and unsatisfactory to patrons, and that the distributing system is in such poor condition that a continuation of service would require the construction of a new pipe system throughout. Peti

The

tioner contends that its leakage expense alone, consisting of the purchase, from the city, and heating of 90,000 gallons of water per day is calculated to equal $5,562 per heating season. number and locations of leaks are unknown and unascertainable without large expense, due in considerable part to the pavements over the system. It is quite probable that the physical condition of the pipe system is such that repairs of existing leaks, if made, would soon be followed by new leaks in other places.

The present system is of too small capacity in its main arteries, and too extensive as to lengths, to be considered capable of adequately serving both the actual and potential patronage in the district traversed.

The Commission has, through its Engineering Staff and otherwise, investigated, as fully as possible, the chances of financial success for a plan of constructing a new and proper heating system in a more restricted area, and of building up the patronage throughout such restricted area to the fullest extent. The high cost of building such new pipe system at this time, the difficulties of securing the necessary capital, labor and materials, the existing prejudice, and other factors, all make it appear inadvisable to require the company to undertake such program.

The present situation is quite unfortunate for both the company and its heating-service patrons. The company must, in the event of a discontinuance of the service, lose such part of its investment in this utility as has not been amortized out of past earnings, whereas the business might easily have been put on a profitable basis by the adoption of a proper policy, say 10 years ago. The customers or patrons must, apparently, at this most inopportune time, make provision for furnishing their own heat, individually.

A call for applications for service during the next heating season of 1920-21 was published in the Kenosha newspapers, several weeks ago, a blank form of application being presented for clipping, filling out and filing. The response to this call was surprisingly small in view of the claims heretofore made as to the existence of an extensive demand for the service in question.

The circumstances all lead to the conclusion that the Commission cannot justly require the continuation of heating service in Kenosha.

[U.-1860]

IN RE APPLICATION OF THE SEYMOUR-SHIOCTON TELEPHONE COMPANY FOR AUTHORITY TO INCREASE RATES

Decided May 24, 1920

MEMORANDUM OF DECISION

Applicant, Seymour-Shiocton Telephone Company, operating exchanges at Seymour, Black Creek, and Shiocton, and performing switching service for the Black Creek Telephone Company and the Town Line Telephone Company of Seymour, seeks to increase rates. The Black Creek exchange is connected by a trunk line with the Wisconsin Telephone Company's exchange at Appleton. Incoming calls over this trunk, which is owned by the Twelve Corners & Mackville Telephone Company, are handled on an unlimited basis, but for originating calls a toll of 5 cents is charged.

Depreciation and Return. A valuation of the property as of November 1, 1917, showed a reproduction cost of $52,177, which net additions since that time have increased to $55,680. Since no charges to the depreciation reserve have been made for property and plant reconstruction during the last few years, an allowance of 121⁄2 per cent of the reproduction cost is adequate for depreciation and return. This would leave a deficit on the basis of 1919 operation of $1,918.

Revenue Requirements. For the present year wages of operators have been increased by $1,960, which will bring the total deficit to $3,878, while the schedule proposed would yield increased revenues of from $5,075 to $6,615, depending upon whether subscribers choose to pay rentals on a yearly, quarterly, or monthly basis.

Toll Charge. Applicant seeks to put in effect a 5-cent toll charge on all messages over the Mackville line between Black Creek and Appleton. A small charge that will cover the cost of service and have a tendency to reduce the calling rate, and thus result in a better grade of service, would be beneficial to all concerned, but such a charge need not exceed 3 cents.

Switching Rate. Applicant also seeks to increase the switching rate from $3 per year to $7 if paid on a yearly, and $9 if on a monthly, basis. The data submitted indicates that a charge of $6 will cover the cost of this service.

ORDER accordingly, authorizing a schedule including the following net rates: Business, one-party $2.50 per month, two-party $2.25, fourparty $2; residence, one-party $1.85, two-party $1.60, four-party $1.35; rural, $4.75 per quarter; gross rates 25 cents per month additional, and the usual discount provisions to apply.

[U.-1867]

IN RE APPLICATION OF THE SHARON TELEPHONE COMPANY FOR AUTHORITY TO INCREASE RATES

Decided May 24, 1920

MEMORANDUM OF DECISION

Applicant, Sharon Telephone Company, serving a total of 383 subscribers, of which 168 are rural, seeks an increase in rates.

The book value of the property as of December 31, 1919, is $19,506.66, including $5,249.13 for the central-office building.

Operating expenses, exclusive of depreciation, for the past year were $4,045.35. The depreciation reserve appears to have been incorrectly handled. Long-distance tolls have also been incorrectly reported, and with corrections for these items, a gross income of $524.97 results for 1919.

Expenses for the current year, however, will be in excess of those for 1919 by at least $400 per year. The proposed rates will result in an increase in revenues of $969, which will still fall far short of yielding an 8 per cent return.

The service rendered by applicant is satisfactory, and while its system of accounting is not up to standard at present, it will be improved by the part-time services of an efficient bookkeeper.

The schedule proposed does not provide for party-line service, and as the increased rates may result in a demand for such service, the schedule authorized will provide such rates.

ORDER authorizes the following schedule of monthly net rates: Business, one-party $1.85, two-party $1.60; residence, one-party $1.35, twoparty $1.10; rural, $4.50 per quarter; the usual discount provisions to apply.

[U.-1902]

IN RE APPLICATION OF THE MONTELLO & HARRISVILLE ELECTRIC LIGHT AND POWER COMPANY FOR AUTHORITY TO INCREASE RATES

Decided May 26, 1920

MEMORANDUM OF DECISION

Applicant, Montello & Harrisville Electric Light and Power Company, seeks to increase its rates for commercial lighting.

The value of the plant is approximately $40,000. An allowance of 12 per cent, or $4,800, will be reasonable for depreciation and return. Operating expenses will be increased $1,200 per annum over 1919, on account of necessary wage increases, resulting in a total operating expense of $11.400. Revenues, under the present rates, amount to approximately $10,600.

ORDER authorizes the following rates for commercial lighting: Minimum bill, $1.20 per month; first 25 kilowatt-hours per month, 12 cents; next 50, 10 cents; all over 75, 6 cents.