mercial rate, however, is considerably higher for Cudahy, South Milwaukee, and Carrollville than for Racine and Kenosha. In view of the volume of sales in Cudahy, South Milwaukee, and Carrollville, and of the fact that the commercial rate is now relatively high in those places, it is our conclusion that the increase herein made effective should not be as great for the territory north of Racine as for Racine and Kenosha except as affecting the demand schedule. From a consideration of the facts before us in this case, and after a careful study of the conditions in so far as we have been able to determine them at this time, it is our conclusion that an increase amounting to about 25 cents per thousand cubic feet should be authorized for all gas sold by the Lake Shore Division of the Wisconsin Gas and Electric Company, excepting for gas sold at Cudahy, South Milwaukee, and Carrollville which is not sold under the demand-rate schedule. For this portion of the sales an increase amounting to about 10 cents per thousand cubic feet is all that should be authorized under present conditions. We believe it desirable at this time to restate the rates in order that the necessity of distinguishing between the regular rates and the surcharge may be eliminated. In doing this we have changed the discount feature somewhat, although we believe that in the main these changes will not be serious. If it should develop that some other form of discount than the one provided here is desirable under the circumstances, such change can be made as appears desirable. There is something to be said in favor of changing the steps. in the various schedules so as to make them equal in all localities. However, it should be noted that the shortest primary step of any of the schedules is 4,000 cubic feet, which is an amount much above the average amount used by domestic consumers, so that the great bulk of the consumers are not affected in any way by differences in the steps. These differences are not so serious as to require change at this time because of their effect on consumers using large quantities of gas. IT IS THEREFORE ORDERED, That the Wisconsin Gas and Electric Company be, and the same hereby is, authorized to discontinue its present rates for gas service in its Lake Shore Division and to substitute therefor the following rates: South Milwaukee, Cudahy, Carrollville And Territory Immediately Adjacent to the High-pressure Pipe Line North of Racine as Covered by Present Schedules Filed by the Company The demand rate shall be applicable under the same conditions as the demand rate now in effect. For each 100 cu. ft. of the first 200 cu. ft. of demand per hour $9.60 per month For each additional 100 cu. ft. of demand per hour... 4.80 For the first 20,000 cu. ft. per month... " 95 cts. per M cu. ft. DISCOUNTS Bills rendered under the commercial-service rate shall be rendered at the gross rate and the difference between the gross and net rate shall constitute a discount for payment within 10 days from the date of the bill. For gas sold at the demand rate the discount shall be 5 per cent of the first $25 and 1 per cent of all over $25 for payment within 10 days of the date of the bill. IT IS FURTHER ORDERED, That rates, rules, and regulations not specifically changed by the terms of this order shall remain in full force and effect. IT IS FURTHER ORDERED, That the increases herein authorized may be made effective for gas sold subsequent to the first meter reading taken in accordance with the company's regular meter reading practice following the date of this order. [U.-1646] IN RE APPLICATION OF THE MARION & NORTHERN TELE PHONE COMPANY FOR AUTHORITY TO INCREASE RATES Decided October 31, 1919 MEMORANDUM OF DECISION Applicant, Marion & Northern Telephone Company, seeks to increase rates and to establish installation, moving, and special charges. Its plant and equipment was valued at $41,218.72 as of December 31, 1918. Exclusive of depreciation and taxes, operating expenses for 1918 averaged $15.50 per telephone. Revenue Requirements. Operating expenses are high when compared with costs of similar companies, applicant having apparently charged reconstruction costs of about $1,800 as maintenance expense. The charges for depreciation are also too high. If the depreciation reserve be credited with 3 or 4 per cent on its balances, an annual charge to operating expenses of 6 per cent of the book value is adequate. Making these corrections, the total operating expenses in 1918 would have been $14,813.81, and the gross income $3,145.48, a return equal to 8.22 per cent. The total annual increase in pay-roll expenses will be $4,812. While some of this increase will be offset by increased earnings due to growth of business, and some will be apportionable to capital expenditures, they will increase operating expenses by at least $3,000. Proposed Rates. The exchange rates proposed by applicant would increase the earnings by about $3,384 per year, and the miscellaneous rates and charges, except the installation charges, by not more than $100. Service Standards. Some circuits are heavily loaded, and applicant should reduce the number of subscribers per line to the recommended standard of 12. ORDER: Applicant is authorized to place in effect the proposed rates and charges, except the installation and rural extension special charges. The moving charges are limited to $1 and $2, and the change-in-equipment charge to $1. Applicant shall also reduce the number of subscribers per line as specified, and make all of the present grounded circuits full metallic. The rates authorized range from $2.75 to $1.50 at the Clintonville exchange, and from $2.25 to $1.50 at the Marion, Tigerton, and Gresham exchanges. [U.-1665] IN RE APPLICATION OF THE CEDAR GROVE TELEPHONE COM- Decided October 31, 1919 MEMORANDUM OF DECISION Applicant, Cedar Grove Telephone Company, seeks to increase its present rate of $1 per month per telephone. The book value of the property shows a reproduction cost of $14,131, and reproduction cost less depreciation of $7,180. Load on Local Lines. The local lines have in some instances a large number of subscribers per line. There should not exceed two parties per line on local business lines, or four parties on local residence lines. Present Rates Inadequate. While the capital stock, depreciation reserve, and notes and bills payable amount to but 77.5 per cent of the estimated value of the plant, no dividends have been paid, and a reasonable return since 1909 would have exceeded the difference between capital liabilities and the value of the plant. No exorbitant salaries having been paid to officers, it follows that the revenues accruing from the $12 rate have never been sufficient. Revenue Requirements. Operating expenses for 1918, excluding interest, depreciation, and taxes, were $9.48 per telephone as compared with an average of $10.17 for Class D companies. The increases in operators' salaries arising from the application of the minimum-wage order will amount to about $725 annually, and total operating expenses for the coming year will approximate $3,165. A 14 per cent allowance for interest and depreciation, and $100 for taxes, will make the total revenue demand $5,393.34, of which $4,832.32 must be met by exchange revenues. Installation Charge. The Commission will not authorize installation charges until after a decision in the case pending covering this matter. ORDER: Applicant is authorized to place in effect, among other For business, onerates and charges, the following net annual rates: party, $24; business, two-party, $21; business extension, $12; residence, one-party, $21; residence, two-party, $18; residence, four-party, $15; residence extension, $9; rural business, $24; rural residence, $21; gross rates of $3 higher being provided. Also moving charge of $1 for local inside moves, $2 for local outside moves, and $3 for rural One-, two-, three- or four-party lines beyond village limits, $6 per year per quarter mile or fraction thereof for the distance beyond such limits, to be divided equally between the parties served, and added to their regular rentals. moves. [U.-1667] IN RE APPLICATION OF THE THORP TELEPHONE COMPANY FOR AUTHORITY TO INCREASE RATES Decided October 31, 1919 MEMORANDUM OF DECISION Applicant, Thorp Telephone Company, seeks to increase its exchange service net rates 50 cents per telephone per month, and its switching charges from $4 to $7.20 per telephone per year. Valuation. The book value of the property and plant, as of December 31, 1918, amounted to $16,637.73, which is nearly $83 per subscriber, and is unusually high for an exchange of this character; $15,000 is considered a fair value for the property. Proposed Rates. Operating expenses were $12.03 per subscriber per year, which is considerably above the normal for similar telephone utilities. Even normal expenses show the necessity of additional revenue, and the application of the proposed rates to the present number of subscribers would result in net income available for return of $1,295.98, or slightly over 8.6 per cent per year. Rural Rate. The rate of $6 gross per telephone per quarter for rural grounded service is an exceptionally high rate for the class of service furnished, and should be cut to $5.25 gross. Switching Rate. The rental for switching service of $7.20 per telephone per year is also too high. The cost of this service would be adequately covered by a per-subscriber charge of 50 cents per month, or $6 per year. ORDER accordingly, specifying a schedule including net monthly business rates of $2.50 for one-party lines, and $2.25 for two-party lines; residence rates of $2 for one-party, $1.75 for two-party, and $1.50 for three- and four-party lines, with gross rates 15 cents and 25 cents higher. |