Daily capital journal. (Salem, Oregon) 1903-1919, 1915-07-17
Public Service Commission
Makes Important Order In
Electric Utility Case
HIGH RATESDISCRIMINATE
AGAINST RURAL DISTRICTS.
Same Policy May Apply To
Other Similar Cases Which
Are Pending Orders

That the policy of keeping up rates
for service in the smaller communities
to the same level as is maintained in
larger communities, as universally prac.
ticed by public service corporations, has
tendency to deprive the smaller com.
munity of its right t. receive such sery.
ice at reasonable iu,C Of compensa.
tion and should be discontinued is one
Of the conclusions to be drawn from
the order of the public service commits.
sion this morning in the ease of the
Hood River Gas & Electric company
and the Hydro-Elcctric company, Of
Hood River
Another important point brought ont
in the analysis of the commission 8 or.
der in this case, which may also fig.
ure in the cases of o,nyr public service
corporations in which similar orders are
pending, is that public service corpora,
tions should not fix their rates of con.
sumption upon the basis of the actual
amount of money invested in the util
ity but rather that tae rate Of service
should be based upon the amount OF
money which the community pays then
or which they expect the community t,
pay them. The total valuation of tn,
Hydro. o.Electric company 's properties II
fixed at Sl20,900 and that of the HOOD
River Gas & Electric company at SlG2.
296, or a total gross valuation of 1888,
296, but the total valuation figured as
basis upon which charges for seryic,
should be levied is fixed at S2l9OOG.
In this case the commission orderet
a material reduction Va the rate charged
by both companies, which are consoli
dated under the order also TO rura
customers in proportion 10 that chargct
for commercial and business purposes
In general in other words, the com
mission finds that the cost of service fol
rural communities, figured upon tn,
same basis as used for other rates fol
larger communities makes the rate &c
high that it is prohibitiye In thii
particular case the commission find,
that where the 10 cent rate Is found (,
be in effect in rural communities n
cent rate IN found to be more reason
able.
The two companovs were formerly
competitors but are now owned and
controlled by the same stockholders
which Is the usual outcome of such com.
petitiye enterprises, The commission
states-and the commission orders a
complete consolidation in management
as well az in secret fact for the pur.
pose Of operation, thus cutting out the
waste Of duplication in supervision. The
commercial or business rates are also
lowered and while the commission finds
that the higher rates charged for rural
customers are not unjustiy discrimina.
tory in this case, the minimum charge
for rural customers % reduced from
$3.50 20 sl25
This is the first complaint in an elcc.
tric utility case IN which the rates
have been completely Analysed and Is
very important since the policy Of the
commission is 10 a certain extent de.
fined and may possibly apply 10 all
other investigations " n similar ma.
ture, including the ease OF the Portland
RAILWAY, Light & Power company IN
which Salem is more directly interest
ed.