purposes when a cheaper lot would answer the purpose should be included at the value of the cheaper lot. A power plant not used but held for a possible emergency should be included at the value of such emergency service. § 211. Discarded property-Wisconsin Railroad Commission. In the LaCrosse Gas and Electric Company Case, 8 W. R. C. R. 138, 164, decided November 17, 1911, the Wisconsin Railroad Commission holds that when unused property may be disposed of without affecting the business, the only warrant for its retention is expected savings and additional net income. This being the case, an addition to the physical value of the plant for non-operating property can be justified for rate-making purposes only when the income expected therefrom is added to the actual income or is deducted from the operating expenses. The Commission says (at page 164): No evidence was furnished that shows that anything included in table II is required for the operation of the applicant's plants. While it is claimed by the applicant that certain items, especially the ammonia concentrator, may be used in the near future, we do not find that the present business nor its immediate prospective growth would in any way be materially affected by the disposal of this equipment. If the ammonia concentrators are retained by the company and are operated at some future time, then the saving or profit that may be derived therefrom should offset the interest, depreciation and operating costs of the same. When such non-operating property is held by a utility, the only warrant for its retenis expected savings and additional net income. This being the case, an addition to the physical value of the plant for non-operating property can be justified for rate-making purposes only when the income expected therefrom is added to the actual income or is deducted from the operating expenses. Therefore, whether or not this non-operating equipment may profitably be kept on hand, is a matter which need not tion be passed upon for the purposes of this case; the relative economy of holding non-operating property as against purchases at such time as the equipment in question may be needed, is a matter concerning which the management must use its own judgment. The simplest equitable method would be, it seems, not to consider these investments in the determination of rates. In the case of the application of Darlington Electric Light and Water Power Company, 5 W. R. C. R. 397, decided June 17, 1910, involving the valuation of an electric light and power plant for rate purposes the Commission held as follows: 1 Where equipment not actually part of the producing plant has been retained and serves as an emergency or reserve unit, it is properly included as property used and useful in serving the public. Equipment, however, which has been cast aside for larger units, more adapted to the present use of the plant, or which has been abandoned as impracticable, cannot be included as a part of the valuation serving as a basis for adjustment of rates. The case of City of Appleton v. Appleton Water Works Company, 5 W. R. C. R. 215, 240, decided May 14, 1910, involves the valuation of a water plant for rate purposes. The Commission says: The wells in question appeared to have been the original source of water supply for respondent's plant, but their use seems to have been discontinued when the river intake, filters and reservoir were added to the plant. As these wells are no longer used or useful for service, they must be eliminated from the valuation. The statute limits the scope of the investigation to ascertaining the value of the active property of the utility. § 212. Inclusion of river intake and filter galleries, Wisconsin. Re Manitowoc Water Works Company, 7 W. R. C. R. 1 For a discussion of this general problem, see also City of Beloit v. Beloit Water, Gas and Electric Co., 7 W. R. C. R. 187, 234, July 19, 1911. 71, 80, decided June 27, 1911, involves the valuation of a water plant for purposes of municipal purchase. The city objected to the inclusion of the value of the river intake as inadequate for the purpose intended and at present neither used nor useful. The Commission, however, included the intake in the valuation. The Commission says (at page 80): The company was required and compelled by the city to build this intake. From the point of view of fire protection its construction was also a step in the right direction. It further appears that the city built or authorized to be built the sewers which empty into the river above the river intake. In short, while compelling the company to build the intake, the city seems to have made no effort to protect the water above it from becoming contaminated and from rendering the use of the intake a menace to the public health. The presence of the sewer outlets and the consequent pollution of the river water is a matter over which the company had no control and for which it is in no way responsible. As a matter of simple justice it would hardly seem fair to deprive the company of the value of property which it installed at the order of the city and which the city failed to protect and rendered valueless by its own actions. In other words, if the intake is of comparatively little value to-day, it is so because of conditions for which the city is in a large measure responsible. To entirely exclude it from the valuation would, for these reasons, hardly seem fair. In this same case the city objected to including the value of filter galleries, claiming that these galleries were not a necessary and useful part of the equipment of the plant. The Commission says (at page 79): Some effort was made by the city to have the value of the galleries excluded from the valuation of the plant, on the grounds that they were not useful or valuable as a part of the systern. It appears that the original plans called for the con struction of these galleries as the water producing feature of the plant. It appears further that the galleries failed as a source of supply and that they have since been used as storage reservoirs. As a means of storing water these galleries appear to be used and useful as a part of the plant. Furthermore, as previously described, these galleries constituted a part of the experimental work conducted to secure a source of supply, and it would seem that the cost of the galleries should be a legitimate charge to the construction or a part of the investment necessitated in the building of the system. In view of these facts it seems only just that the cost of these galleries should receive consideration herein. In the light of the investigations made, it is believed that the staff's figures should stand. § 213. Discarded property-Des Moines Gas Rate Case, 1896. In Capital City Gaslight Company v. City of Des Moines, 72 Fed. 829, 844, decided January 8, 1896, the court says: Defendant insists that a part of the present gas plant is not only unnecessary for present use in supplying gas in Des Moines, but also for probable use in the near future, and that that part of the plant devoted to manufacture of coal gas should not be included in any computation for determining the money value, or in any basis used for determining on what plaintiff may rightfully ask income or profits. The fact that plaintiff has at Des Moines, in operation, two distinct or separate parts of its gas plant,-one for manufacturing coal gas, the other for water gas,-has served to increase greatly the difficulties attending a decision of this matter. If I remember rightly, all the witnesses agree that, the coal-gas plant having been erected and being on the plaintiff's ground, they would not recommend its destruction. There exists a marked difference of opinion among the experts as to whether, if erecting a new plant, they would advise such coal-gas plant to be included as a part of it. The trend of proof is to the effect that the later-built plants are almost exclusively for the manufacture of water gas. But on this point I am not satisfied that it would be improper to include the coal-gas plant, and therefore, for present hearing, retain it as a part of the property to be considered in our calculations as to rates. But its retention complicates the decision herein, for there is thus retained an element whose exclusion would take with it many obstinate and preplexing questions. Returning to the attempt to ascertain the cost of present reproduction of plaintiff's gas plant, or rather of a gas plant which shall be equally efficient and capable in supplying gas to the defendant and its citizens, and examining the proof for that purpose as introduced by plaintiff and defendant, I conclude that suitable and proper real estate could be obtained, and such plant erected, mains laid, etc., with same efficiency to meet demands of the city as that now possessed by plaintiff, for $400,000. The experts sworn on plaintiff's behalf have varied in their figures from about $450,000 to about $500,000. From these estimates must be taken that part of the present plant which was used for fuel gas, and is now not available for present use; also, the overestimate by them made on the real estate; and also making allowance for storage capacity on the holder last erected beyond what seems, under present circumstances, profitably necessary. On the whole proof, I reach the conclusion above announced. § 214. Land acquired in advance of present need-New York Public Service Commission. An exceptionally clear and illuminating discussion of the treatment of land acquired in advance of present need is contained in the opinion of Commissioner Maltbie in the case of Mayhew v. Kings County Lighting Company, 2 P. S. C. 1st D. (N. Y.) —, decided October 20, 1911. This is a rate case. Commissioner Maltbie applies the general theory first worked out by him in the Queens Borough Gas and Electric Light Case, 2 P. S. C. 1st D. (N. Y.), decided June 23, 1911, in regard to the treat |