Arizona republican., 1912-08-28

tors. He allowed nothing for interest during the periods of construction and reconstruction, saying the cOmpany's reports did not indicate that any inter est had been paid He said it is not customary to issue bonds until the payments for machinery come due and that it is not likely the company had a large sum of money in bank await ing these payments. He admitted there might be justice in allowing in- terest on such sum as was required for labor. MT. KOiner says he does not be- lieVe in the theory advanced of bur dening a utility company with 'imag mary costs" such as administration services. engineering contingencies, le- gal expenses and contractors profits, but charging to the plant only the money 1egitimately spent. He takes exception to the salary of $100 per month paid to the company's attorney. He refers to a report made by the com pany in July relative to monthly sal aries, promotion expenses etc, which report he attaches saying the amounts points enumerated above.
 MT. KOiner however says he believes a reasonable charge should be allowed for what is called going value" and has allowed $4,0O0 on one plant and 5000 on the other.
 In valuing the distributing systems the expert says he has taken into ac- count it's Diece-meal construction. Re specting the realty MT. Koiner says the ch wit actIy what they paid for it; not its present price. He does not believe that l for the purpose of rate making, the ap l preciated value of the real estate or l the increased cost of taxation on the | appreciated value, should be taken into | account. He says the amount of work ing capital necessary to conduct the
 business in Phoenix is not large; that
 the money coming in monthly from | consumers is available to pay out or
 materials and should very nearly ap- proach the amount necessary to ex- pend for those purposes.
 l In making rates he says they should
 be based on the actual valuation O the property, stripped of all over capi' l talizatiOn, taking into account what
 ever rate of profit the commission see' fit to allow He suggests as fair, pc | cent on the electric plant and pc
 cent on the gas plant. He also files al 1 exhibit which he contends is warran for the rate of depreciation he allow
 which runs from per cent to 10 pc | cent
 The present gas plant he says is wei 1 constructed and ample for presen needs and he approves the methods b, l which it has been planned for the pres
 ent and future. The new electric sub
 station he says is well constructed
 ample for the present and also provide!
 for the future. He believes the plan 0 building ahead is a good one as tn 1 interest on the investment will not off
 set the cost of piecemeal construction The steam plant is approved of ant
 regarded as very necessary. The cleo
 tric distributing systm he says Is no of the best construction. The newer
 work is all right but much of it is olt
 and will soon need replacing. Nothing is allowed for good will which he
 says it would be fundamentally wrong
 for the company to capitalize. The need of it's service has been brought
 about by the people and if the com pany cannot serve them the people car
 serve themselves through municipa
 plant No allowance was made for the
 old gas plant and none for power hous-
 es Nos. 1 and ?, now out of commission
 Continuing he says: Among the var 1 ious items of expenses in the electrical i department, the largest is that of pow CT purchased and generated, and in the manufacture of gas the largest item IS i that of fuel or oil necessary for the | manufacture of gas. The next largest