Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-11-20

stall was asked to report upon sew
eral matters. The first two questions
submitted to him are as follows:
/. Would q State wide rate for gas
In the State of New Jersey. In all
localities served by the Public Serv-
ice Gas Company, be an equitable ar
rangement; II so, for what reason; II
not so, for what reason7
2. Assuming that your opinion Is
that q Statewide rate would not be
an equitable one, will you give us
your Judgment as to what sub-diyi-
sions of tho territory they supply
might properly have a uniform rate.
This matter we ask that you will de-
termine by balancing, IL necessary,
considerations of equity as against
those of convenience and economy in
the production OF gas.
MIR. ForstaIps Report.
Mr.. Forstall has submitted to the
board a report analysing from the
standpoint of an expert in making
and selling gas the position of the
Public Service Gas Company. As q
result of this analysis he reaches the
conclusion that the base price cannot
be equitabiy reduced in the Hudson
division below the ninety cents now
In effect. Furthermore, Mr.. Forstall
concludes that IL the board proceeds
on the theory that the uniform rate
should not be applied and that the
charges for gas should be based on
the costs of supplying service In the
municipalities served, this would log
ically lead to different rates for diff
ferent classes of customers In each
community. The result, as he shows,
would be to increase very notably
the rate per thousand to customers
taking less than 1000 cubic feet per
month. This would include the large
majority of consumers in both the
Hudson and Essex divisions. On this
point he says;
"From the study of a close analysis
of the conditions in other companies
am sure that. with the conditions
obtaining in the Essex and Hudson
divisions even in 1912, the price to
at least so per cent. of the consumers
should be over ninety cents per thou
sand cubic feet
The impression is prevalent that
with a Statewide ninety-cent rate
the more populous divisions obtain
less than their due advantage. Mr..
Forstall In his report finds that, even
pany of serving different classes of
consumers be not token into account,
the Public Service Gas Company in
order to obtain the same relative re-
turns in other divisions as 1t obtains
in the Passaic division under the
rate, would have to
charge the following base price:
In the Essex division ......... 80. 1877
In the Hudson division, either
S0872 or ..........,......... 0.oo9
In the Bergen division. LII
In the central division. 1928
In the southern division. ...... 1.095
(Repart. p. So These moreover are
the prices II would have to charge
under the conditions obtaining in
1912.
Gas OIL a Factor.
We are further advised by him that
the increased price of gas oil will fur
Their increase the cost of gas produc-
ton by the Public Service Gas Com
pany. This increased cost will not
affect said company until 1914. The
present price of gas oil governing
their contract for oil for 1914, he in
forms us, is unusually high, and
would increase the cost per thousand
In the Hudson and Essex divisions
in 1914 by 4-10 cents and 6 $40 cents
respectively. He expresses the opin-
ion that the average price for oil in
the next ten-year period will average
80 per cent. higher than the price
paid by the Public Service Gas Com
pany in 1912. His estimate OF the
average increased cost per thousand
of gas in the Hudson division for the
coming ten-year period Is 2-10 cents,
and in the Essex division, cents.
Without any differentiation be-
tween the various classes OF ordinary
consumers, the increased costs of gas
oil per thousand III Mr.. Forstall's
estimate of the average increase In
gas oil for the coming decade is ap-
proximately correct) would require
the company, in order to obtain the
same rate of return as the ninety
cent rate in the Passaic division now
allows the INTO charge, In the Hudson
division, between $0.s24 and 1884 and
in the Essex division $0.S77. In his
report (p. 81 Mr.. Forstall says:
"While 1t will be seen from the
above discussion that, strictly speak
ing, uniform rate Is not equitable
over the whole territory supplied by
the Public Service Gas Company, 1t is
necessary to face the conditions that
such rate has been in effect for sew
eral years and that a disturbance of
this rate, il made with fairness to the
company, will not produce reduction
in price to the majority of consumers
in any division. but will involve rails
ing the price in three divisions"
He also remarks that:
THE making of an accurate valua-
ton for each of the communities in
the territory of the Public Service Gas
Company would require the expendi-
ture of large amount of time and
money" (Report, p. 60
He adds
IF 1t is thought advisable to make
such an investigation l think that 1t
should be made to cover all divisions
before putting into effect a price for
any one, and should be conducted with
a view solely of determining the price
which should be charged in each divi-
sion as a whole without any attempt
to determine what might be the
proper prices for each of the commun-
tiles Included in division" (Report.
p. 100
Change Would Increase Rate.
As the matter stands, the board is
confronted with its statement hereto
| fore made to the city of Jersey City
that it would value the properties OF
the Public Service Gas Company In
| the Hudson division and fix such rate
| for gas as In the Judgment OF the board
would be Just and reasonable. This
| was prediceted on the opinion Their
| entertainedi that such valuation and
establishment Of rate would be in tbs
=.