The labor advocate. [volume] (Cincinnati, Ohio) 1912-1937, 1916-05-06

a sliding scale ranging from GO cents
for the first 900 cubic feet down to 35
cents for all natural gas consumed in
excess OF 5000 feet monthly, is suggested
by the Union Gas and Electric Company
in a letter to City Council, read as ac-
ceptable to the corporation and one
which its officers ask the city lawmakers
to adopt when they finally revise the rate
to be charged.
In addition minimum monthly charge
of GO cents is sought, and an increase Of
the regular schedule of five cents for
1000 cubic feet if the bills are not paid
within five days after they are rem
dered
Officials of the company say that on
the basis OF the consumption OF gas in
1915, the rate schedule which they re-
quest Council to adopt would produce
an increase of revenue Of Approximately
Sl,25OOOO The schedule, it is said, rep
resents an earning of per cent upon
the minimum fair value Of the property.
The company feels that a much larger
increase, while justiiiabe as reasonable
rate OF return, might serve so to reduce
consumption as to Offset some OF the ad-
vantages. "On this account moderate
increase is proposed in the hope that the
net result will prove beneficial to the
company, without undue hardship to any
consumer.
As to the term of the ordinance the
company states in its letter that it will
accept an ordinance containing the rate
schedule suggested for period of five
years only, since natural gas rates must
increase III the future to meet the un-
avoidable increased cost of the service"
The company calls attention to the fact
that a. G., King, Chicago expert en-
ployed by the city To value the corpora
tons plant, adopted per cent as rca-
sonablc rate of return on the present
net value of the property. The company
contends that return as high as 10 per
cent is justiiiablc and necessary in the
case of natural gas properties.
But, Notwithstanding these inaccurate
and unfair standards used by Mr.. King,
the net earnings during last year, as re-
ported by Mr.. King" the company says,
show return of only 3G per cent a
year upon his valuation of the property.
Based upon fair value for the property
the net earnings from the gas business
do not exceed > per cent year
Schedule Is Submitted.
The schedule which the company asks
Council to adopt is as follows:
Net rate for the first 900 cubic fee,
or fraction thereof, monthly, 60 cents pei
1000 cubic feet.
Net rate FOR the next 1000 cubic feet
monthly, 80 cents per 1000 cubic feet.
Net rate for the fourth and fifth thou
sand cubic feet, monthly, - cents pc
1000 cubic feet
Net rate for all excess over 1000 GU
bic feet, monthly, 35 cents per 1000 cu
bic feet
Minimum monthly charge 60 cents
The letter states that an analysis o
the expenses for the year 1913 shows tina
the cost OF meter reading, billing and col
lccting together absorbed the entire rev
enue received from customers whose av
cragc bill is 30 cents a month but sucl
expense represents only small percent
age OF the revenue from customer
whose average bill is $40 a month ant
a still smaller percentage OF bills OF So
and upward a month The compan,
contends that in any increase of ga
rates the proportion OF increase shoulC
be several times larger in the case OF tn
small consumer, who is now Improbable
than in the case of the large consumer
whose business would now yield a prof
if not offset by the losses from tn
smaller consumer.
President w. w Freeman, who signc
the letter to Council, in further substan
tation OF the claim that the sale OF nat
ural gas at the present rate charged
Improbable, says that notwithstandin
the great increase in the quantity of ga
consumed, the net revenue from gas sale
from 1910 to 1915 inclusive average
$275,OOO a year less than the net revenu
from artificial gas in 1906. In the latte
year artificial gas only was sold. Th
consumption was 2,OsO. .13S 900 cubic fee
the gross earnings Sl9ll, ,763.G7, and tn
net earnings S7G7,1GL77. In contra'
with these figures Mr. Freeman report
that during 1918, l4,4l3, $40, 900 cub