Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-12-01
PUBLIC SERVICE
FIGHTS GAS RATE
IN ERRORS COURT
Argues Against Year-0ld Re-
dnction in Passaic C0nn-
ty Division.
Especial to the Newark stnr.l

Especial 10 une newark Sfuf.l
TRENTON, Dec. 1.-Argument was
heard by the Court of Errors and
Appeals today in the suit brought by
the Public Service Gas Company to
review and set aside an order made
by the State Board of Public Utility
Commissioners on December rs, 1912,
reducing the price of gas in Pater-
son and vicinity from 81 per thou
sand cubic feet to ninety cents per
thousand cubic feet. The order took
effect February /, 1913. The Supreme
Court affirmed the order. and an ap-
peal was then taken to the errors
court.
The territory covered in the case is
known as the Passaic county divis-
ion, and this division was taken by
the Utility Commission for the begin
ming of it's inquiry into the rates
charged for gas in this State. At the
close of the argument, decision was
reserved
Prior to the commencement of these
proceedings the, Public Service Com
pany had a uniform rate of 81 in all
the territory where 1T furnished gas
except in the few municipalities,
where the rate was s1.10, with a re-
bate of ten cents for prompt pay
ment.
No Profits, the Plea.
Frank Bergen, of Elizabeth, and
former Attorney-General- Robert H.
McCarter argued the case for the gas
company. They insisted that at the
rot 70 nf on &c
feet the company cannot earn q fair
return on the reasonable value of all
! its property used in the manufacture
and distribution of gas in the Pas
sale division. They claimed there was
no evidence that the 81 rate charged
by the company was unjust or un-
reasonable. and therefore the utility
| board was unauthorized to prescribe
the lower rate.
They claimed that a proceeding to
| fix rates for public service is a pro-
ceeding to take private property for
public use, and that private property
| cannot be so taken for public use by
| o proceeding to fix rate, unless the
rate Is based on the full value of the
property. Counsel claimed that in
| these proceedings the value of the
| gas company's property in the Pas
sale district was not properly ap-
| praised.
The cities of Paterson and Passaic
are both parties to the suit. Edward
f. Mercy city attorney of Paterson; !;
Albert o. Miller, city attorney Of
Passaic, and George l.. Record, of
Jersey City, special counsel for the
city of Passaic, argued in favor of an
affirmance of the order
Commissions Power at Stake.
|
! They opposed the contention of the
gas company that the utility commits
sion should have allowed for the
value of the franchises of the COM
pany, and insisted that that franchise
value cannot be allowed as a basis
of ratemaking. They declared fur
ther that if this claim of the COM
pany is admitted the utility commits
| sion is without power to prevent wat
cred stock in the future Counsel
urged upon the court valuation found
| by the utility board upon the tangible
property of the gas company as at
least $500,000 in excess of its true
value
II was insisted that the Errors
Court should sustain the Utility Com
mission in refusing to make any al
| lowance for franchise value beyond
the trifling cost of acquiring it, and
should nOlu LHdl no SuCH element
should be allowed. except it is includ-
| ed in the early losses of the company
| during the first five or six years of its
| business.
Counsel argued further that the
court should hold that the commission
should fix a gas rate that would not
net the company in excess of per cent.
upon the value of its plant. The pres
/ ent finding, with its rate of 80 cents,
| counsel claims, is based upon an earn
ing of at least 8 per cent.