RATES-continued.

b. Irrigation.

47. Minimum rates for irrigation service were granted in recognition of the fact that dependent upon this service agriculturists could not afford excessive rates and that agriculture should be fostered. Re Utah Power & Light Co. (Utah) 294.

c. Street railways.

Reduced fare to school children as discriminatory, see DISCRIMINATION, 5. Segregation of a portion of a street railway with a view to advancing rates, see RETURN, 56.

Rate increase by a street railway operating at a loss, see Return, 59.

Annotation on street railway rates, p. 292.

Table showing street railway fares charged in various cities, p. 773. Discussion of the rights of a street railway to charge separate fares in zones comprising the limits of former cities now united, p. 184.

Discussion of density of traffic as an element in fixing the rates of a street railway, p. 441.

48. The Colorado Commission ordered the restoration of overlapping zones on a street railway system, where it appeared that a sliding zone line had been in use for over thirty years and that the communities had built up their business with regard to such arrangement. Re Colorado Springs & I. R. Co. (Colo.) 77.

49. A street railway should not be required to embark upon a schedule of rates which the management of the railway is convinced will not bring the relief desired, but on the contrary will increase the difficulties, unless the Commission is satisfied that the railway officials are plainly wrong. Worcester v. Worcester Consol. Street R. Co. (Mass.) 86.

50. In fixing the rates for a street railway, it was estimated that 1 per cent of the passengers carried were children between the ages of five and twelve years. Re St. Joseph R. Light, Heat & P. Co. (Mo.) 767.

51. A cash fare of 8 cents for four tickets for 29 cents and half fares at 4 cents was allowed a street railway to produce a fare per passenger of approximately 73 cents. Re New York State Railways (N. Y. 2d Dist.) 496.

d. Telephones.

Lower telephone rates to stockholders as discriminatory, see DISCRIMINATION, 4.

Apportionment of the cost of operation of a telephone exchange and separation of the property at the back of the switchboard, see RETURN, 6. Increased rates on the assumption that wages of competent operators would be increased, see RETURN, 15.

Consideration of a state-wide telephone system as an entirety in a rate proceeding, see RETURN, 49.

Interstate business of a telephone company considered in fixing rates, see RETURN, 51.

RATES continued.

Annotation on telephone rates, p. 292.

Discussion of metered service by a telephone company, p. 558.

52. A telephone company should not impose a switching charge for nonsubscribers to be collected by the subscribers. Re Tognini, G. & D. Teleph. Co. (Cal.) 72.

53. The charge for business and residence phones combined, should equal the business rate plus the residence rate. Re Stella Teleph. Co. (Neb.) 781.

54. The rates charged for telephone service should bear a relation to the number of subscribers on a line. Re Union Teleph. Co. (N. H.) 598.

55. A rate of $1.75 per month for multiparty residence or rural telephone service was considered high. Re Washington County Teleph. Co. (Wis.) 828.

56. A rate of $15 per season for summer resorts was considered a reasonale rate for summer service. Re Washington County Teleph. Co. (Wis.) 828.

REAL ESTATE.

Water system constructed for real estate promotion as a public utility, see PUBLIC UTILITIES, 1.

REASONABLENESS.

Reasonableness of rates, see RATES, 22-27.

Principle that a just rate must take account of the value of the service as not destroying the principle of the fair return, see RATES, 23. Probable lower operating expenses as an element to be considered in determining reasonableness of return, see RETURN, 25-27.

Less than fair return in view of falling price of oil, see RETURN, 29. Reasonableness of return, see RETURN, 34–77.

Reasonableness of return as a whole, see RETURN, 49–56.

RECOUPMENT.

Rates to compensate for a past deficit, see RETURN, 42, 43.

REHEARING.

Rehearing in a telephone rate case, see PROcedure, 4.

REINSTATEMENT.

Charge for reinstatement, see PAYMENT, 9, 10.

REMEDIES.

Exhaustion of remedies before court action, see PROCEDURE, 2.

REMOVAL.

Presumption that governor based his decision that a Commissioner had been guilty of neglect of duty and misconduct in office upon sulli cient evidence, see APPEAL AND REVIEW, 8.

Removal of Commissioners, see COMMISSIONS, 10-12.

Removal of cases to the Federal court, see CONSTITUTIONAL LAW, 2.

REMOVAL continued.

Power of the New Jersey governor to remove a Public Utility Commissioner, see CONSTITUTIONAL LAW, 12, 13.

Removal of causes to a Federal court, see COURTS, 3.

Sufficiency of allegation in a proceeding to remove a Commissioner for
misconduct in office, see PLEADING, 1.

Procedure to be followed in seeking the removal of a Commissioner, see
PROCEDURE, 1.

RENTALS.

See also METER RENTAL.

Rental allowance as an operating expense, see RETURN, 30, 31.

Rental allowance to a public utility manager as operating expense, see
RETURN, 31.

REORGANIZATION EXPENSES.

Allowance for promotion, consolidation and reorganization, see VAL
UATION, 44.

REPAIRS AND REPLACEMENTS.

Expenditures from renewal and replacement reserve, see DEPRECIATION, 2.

Allowances for depreciation, see DEPRECIATION, 3-12.

Ordinary repairs made in the course of operation as not chargeable to capital, see Valuation, 47.

REPARATION.

1. Rebates of excessive amounts charged for gas under a temporary rate order were not required, since it appeared that even with the excessive rates the gas companies passed through such a period of adverse conditions that the rate granted did not afford them more than a reasonable return. Re Rates for Consumption of Gas (N. C.) 861.

REPRESENTATION.

Effect of a representation on a former hearing by a person supplying water that he was in the public utility business, see PUBLIC UTILITIES, 3.

REPRODUCTION COST.

Elements considered in determining the value of a gas utility, see
VALUATION, 3.

Value of security issues as an element to be considered in a valuation proceeding, see VALUATION, 6.

Valuation of a telephone utility based upon original cost with consideration of present cost of reproduction, see VALUATION, 9. Reproduction cost as a measure of value, see VALUATION, 10-12. Consideration of historical reproduction cost and reproduction cost

new based on prevailing prices in a valuation for condemnation, see VALUATION, 15.

Ascertainment of reproduction cost, see VALUATION, 28–30.

RESCINDING.

Effect of Commission order fixing rates to be charged by a power company instead of the compensation fixed by a contract, see CoN. TRACTS, 1.

RESERVES.

Deferring of dividends until adequate depreciation reserve is accumulated, see DEPRECIATION, 1.

Allocation of the cost of a steam plant used as a reserve unit, see VALUATION, 57.

RESERVOIRS.

Sale of water by owner of a reservoir as a dedication to public use, see PUBLIC UTILITIES, 2.

RESIDENCE TELEPHONES.

Construction of business and residence phone rates, see RATES, 53. Reasonableness of telephone rate for rural service, see RATES, 55.

RES JUDICATA.

A judgment dismissing action for lack of proof as res judicata, see
JUDGMENT, 2.

RETURN.

1. Basis upon which return is to be computed, 1-5.

II. Consideration of operating expenses, 6-33.

a. In general, 6.

b. Payments to holding or parent company, 7–9,

c. Payments to supply company, 10-12.

d. Funded debt expense, 13.

e. Salaries and wages, 14, 15.

f. Insurance on lives of officers, 16.

g. Commission expenses, 17.

h. Bad debts and back wages, 18.

i. War donations, 19.

j. Taxes, 20-23.

k. Future estimates of expenses, 24-29.

1. Rental allowance, 30, 31.

m. Extensions and maintenance, 32, 33.

III. Reasonableness of return, 34–77.

a. In general, 34–36.

b. Factors to be considered in determining, 37–48.

1. Cost of money, 37.

2. Character of service, 38-41.

3. Past earnings, 42-44.

4. Overbuilding, 45–47.

5. Economic distress, 48.

c. Reasonableness of return as a whole, 49–56.

d. Abnormal conditions; emergency relief, 57–61.

RETURN-continued.

e. Reasonableness of specific amounts, 62–77.

1. Electricity, 62–66.

2. Gas, 67, 68.

3. Natural gas. 69.

4. Street railways, 70, 71.

5. Telephones, 72–76.

6. Water, 77.

IV. Net income, dividends, 78.
V. Period of repose, 79.

Annotation on return, p. 329.

Discussion of certain deductions to be made from the gross revenues of a telephone utility, p. 852.

Discussion of a requirement that patrons of local exchanges pay increased rates without increases in toll charges, p. 853.

I. Basis upon which return is to be computed.

Necessity for a valuation upon which to base return, see VALUATION, 1. Discussion of the "service at cost" or "cost plus" plan, p. 133. Discussion of a fluctuating rate base on the reproduction cost theory as it affects utility investments, p. 524.

Discussion of the proper basis for rates, p. 551.

1. The depreciated investment value of a telephone utility was determined to be the fair basis of value for rate making during a transitory period of cost readjustment. Re Southern Bell Teleph, & Teleg. Co. (Ga.) 833.

2. The sale or exchange value of public utility property, where rates are subject to regulation, cannot reasonably be made the basis of rates. Re Michigan State Teleph. Co. (Mich.) 545.

3. A public utility is entitled to a return upon the present value of its property. Hoffman v. Elmira Water, Light & R. Co. (N. Y. 2d Dist.) 409.

4. Street railway rates were based upon a valuation on the theory of actual original cost without deduction for depreciation. Re New York State Railways (N. Y. 2d Dist.) 496.

5. The advantages obtained by purchase of a competing telephone system were held to be insufficient to justify the company in charging rates to yield a return on its entire investment. Re Washington County Teleph. Co. (Wis.) 828.

II. Consideration of operating expenses.

a. In general,

Deduction from the operating expenses of the electric department of a combined railroad and electric utility, see RETURN, 53.

Increased gas rates to offset increased cost of oil and coal, see RETURN, 64. Value of security issues as an element to be considered in a valuation pro

ceeding, see VALUATION, 6.

Determination of medium voltage costs, see RATES, 36.