The Detroit times., 1911-12-13


It's operations. rates and methods OF
charge from July /. 1905, TO June
so 1871.
BY II. II. CROMWELL
/ Grand Rapids, Mich, November 1, 1911
INDEX TO REPORT.
| Introduction.
| status OF the Companies
! lntercorporate Relationships.
supply and Delivery OF Current
Saving by the Stipulation Of 1907.
( Progress OF the Companies (eNten'
sions and betterments).
/ Balance sheets
] Capitalization
/ Dividend History.
Tax Schedules
! Valuation or Properties.
| evenues-operating Expenses.
! Detailed Revenue Distributor.
| Results from Operations.
Apparent Return from Operations.
| Depreciation.
Analysis OF Operating Expenses.
Analysis OF Costs.
1 Rates and Charges
| Conclusions.
Recommendations.
! Exhibits.
INTRODUCTION.
! The purpose of this report Is 10 pre-
I sent a general statement and analysis
| Of the finances, operations. rates and
charges OF the Edison llluainating
Company and it's affiliated companies
| The Peninsular Electric Light Com
pany,
| The Central Heating Company,
! The Detroit Edison Company,
! in furnishing electric service TO the
| citizens corporations and inhabitants
OF the City OF Detroit
An effort viii be made to determine
(ab The reasonableness and equity
OF the rates;
(b) Whether or no reduction is
indicated in any particular rate;
(cl Whether or no the facilities
/ H.. l. n mn
with the increasing demands OF the
community for service.
and, incidentally, TO determine. ~ pos
siblc. the saving TO the consumer dur
Ing the period from July ], 1908, TO
June 80 1911, under the stipulation en-
tered into by and between the Mayor,
,,,. -. operating
companies which stipulation called for
reduction in the primary rate OF z
cents per kilowatt hour for the nrst
sixty hours use OF the electric current,
the new rate 10 continue for n period
of at least three years,
STATUS OF THE COMPANIES,
The Edison Illuminating Company
ostensibly is now the generating ana
operating company in the City OF De-
troit and has been since January !,
1910 in that IL leases and operates the
generating plant OF the Detroit Edison
Company AZ Delray.
r. II leases the Pcninsular Electric
W
terEating current in certain outlying
and residential sections OF the city.
II leases the Central Heating Com
pany, which operates two heating sys-
TENS In the City of Detroit.
The Edison Illuminating Company
distributes. in the form OF direct cur
rent. n portion OF the electricity gem
Grated to the downtown districts.
Bulk sales OF alternating current are
delivered TO sundry large consumers
from the Delray Plant at bus-bar volt
age or high potential
Nominally. the Detroit Edison Com
pany contracts for the sale OF some
hulk business but the revenue there
from goes through the hooks OF the
Edison Illuminating Company.
The Central Heating Company dis
tributes steam to two heating districts,
utilizing the exhaust steam (Which eX-
haust steam may he called hy-pro-
ducD from Generating Plant "B. :"
which plant operates non -condensing.
Generally. the accounts OF the rev
eral companies are kept separately,
but the operations are intermingled
and the accounts finally close into the
Edison Illuminating Company as the
parent operating company, and the De-
troll Edison Company as the parent
holding company.
INTERCORPORATE RELATIONSHIPS
II will be understood that the De-
troit Edison Company is holding
company owning generating plant at
Delray
II owns the capital stock OF the
Edison Illuminating Company, the
Pdnirsuldr Electric Light Company ant
the Central Heating Company
The Edison Illuminating Company
leases the generating plant Of the De-
troit Edison Company at Delray under
annual contract dated January l. 1910.
and paws as a yearly rental for the
use thereof its net earnings after pay
ment OF operating expenses, dCprecia-
IN 81 NJ M
8 per cent dividend on outstandig
stock
The Edison Illuminating Company.
under it's contract with the Peninsular
Electric Light Company, pays the
operating expenses. the cost OF sup
plies and replacements and furnishes
current as required by the Peninsular
Electric Light Company, the latter
company paying therefor (under an
annual adjustment Of operating costs)
it's net earnings after payment OF in
terest on outstanding bonds and per
cent dividend on outstanding stock.
The Edison Illuminating Company.
under contract with the Central
Heating Company. pays the operating
expenses. keeps ur the plant pays the
interest on the outstanding bonds and
I'm consideration thereof. receives the
entire gross revenues Of the Central
tIentinE Company.
The intercorporate relationships are
n matter OF small moment In the deter
minntion Of the questions raised in this
report. provided they do not prevent
a fun analysts and determination OF
fa) the gross revenues
(b) the operating expenses
(c) the value OF the property used
in rendering the service
tdl the net earnings from opera
tions
and further determine
Cal II the rates were equitable
(bJ " the operating expenses were
reasonable
10 II the rate of return was fair
'rhe community generally Is inter-
ested In paying but fair price for
tte ser,iCC rendered and the lowest
average rate for all service while the
individual consumer or the class con
sumner rs Interested in his particular
or class rate and monthly bill
SUPPLY AND DELIVERY or CUR
RENT.
The electric current distributed in
Detroit for lighting and power pur-
noses IS largely furnished from the
plant NJ Dclray
The Delray supply is supplemented
by current generated In station ~ ="
which station furpishes steam TO tho
steam heating ~ stem OF tho Central
Heating Company:
An additional supply 81 current -
nurchssed from the Murphy Power
Company.
The total electric current received
from all three sources less losses and
unHccOunt editor current. is distributed
to several large users who purcha Sc
current IN bulk from the Delray Plant
The electric current distributed bv
the Edison, Illuminating COMPANY is
taken nv that company az the bus-hars
OF the Detroit Edison Company at Dell