The Richmond Virginian. (Richmond, Va.) 1910-1920, 1915-03-29
PROFIT Of MUNICIPAL
OWNERSHIP IS LARGE
Superintendent Compares 1t With that
Under Operation of Private
Corporation.
MAKES STRONG ARGUMENT
Figures Show Difference Of Nearly
Five Million Dollars in Thirty Years
In Favor of the City.

Strong argument against the lease
of the municipal gas plant of the cits
of Richmond to private interests is
presented in a comparative statement
OF the estimated profits from the
Richmond City Gas Works for the
next thirty years at the rate of eighty
cents per thousand feet. under mu-
nicipal operation, and under the pro-
posed thirty years lease at rental
of s140,o 900 per year and one per cent
of the gross receipts.
The comparison made by Superin-
tendent Knowles, of the Gas Depart
ment. estimates the profits on the
basis OF those for the year 1914, after
deducting the difference between
eighty and ninety cents per thousand
cubic feet from the receipts for gas
that year (s5s.a63,s3). and deducting
from expenses the unusual and excess
sive price paid for oil the first eight
months OF the year 1891 6o6.4t).
$3.50, 900 Profit Mt so Gents.
After making these reductions in re-
ceipts and expenses there Is, in round
numbers, a profit of $3.50, 900 at the
rate of soc per thousand An increase
in profits of $4,000 per annum il esti-
mated. based on the yearly average
increase OF profits for the last twenty
years. The comparison allows the
proposed lessees of the gas works
$1,000 for one per cent of gross re-
ceipts the first year, and an additional
5000 increase for the same purpose
each year thereafter.
The estimate of the amount needed
for future improvements is taken from
the report of Forstall & Robinson.
ployed by the Administrative Board to
make a comprehensive report on the
manufacturing and distributing sys-
tens Of the Gas Department for the
boards guidance for the next twenty
years.
In drawing the comparisons there
has been eliminated the usual inter-
est. redemption. taxes, lamp lighting
and City Hall charges against mu
nicipal operation because they are not
included in the proposition of the pro-
posed lessees.
Estimates Conservative.
Considering the large territory re-
Gently annexed and tie. number Of
houses in this territory now ready for
gas. the estimated yearly increase in
profits for the next thirty years is
short OF what the increase will actual
iy be, Mr.. Knowles thinks.
The table OF figures showing proflts
under lease operation and profits
under municipal operation shows they
will be for the first year of the lease
s145,300 and 5000 900 respectively
and for the thirtieth year. 1854 0o6
and s490, 900 respectively. The total
profits for the thirty years under the
proposed lease will be $4.039 500, and
under municipal operation. s10,35o,-
GOO The estimated State taxes on
valuation Of plant for thirty years
to be paid by the city on account of
the works being leased is $3.50 900
Deducting from the profits under mu-
ntcipal operation the amount required
for twenty years for Improvement of
plant and distribution system the sum
of $3.50, zoe. there is left in favor
of municipal operation difference Of
81, sSo,5 500.
City Could Reduce Price.
Larger receipts than estimated
means greater difference in favor Of
municipal operation, SAYS Mr.
Knowles sta tement accompanying the
comparison. 1T only requires an an
nuai increase of about $40 600 in re
ceipts to produce $4,000 increase ~
profits under municipal operation. 1t
requires an annual increase Of $1,000.
600 In receipts To produce 10000 in
crease IN prcNtS Tor the city under the
proposition of the Southern Gas and
Electric Corporation Under NIT
ntcipal operation. II a new process for
cheapening the cost of producing gas
should be discovered. the price to the
consumer could be reduced accord
ingiy. Under the operation OF the
private company the same price
would have to stand for thirty years"
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