The Birmingham age-herald., 1916-05-10
Would Reduce the Price. to Seventy Cents Per Thou sand and Probably More Later
REDUCTION WOULD,
 BE BASED ON TOTAL
 GAS CONSUMPTION
Proposal Is in Hands of the Commissioners and Will Probably Come Up at Meeting Today

Offering to grant an immediate reduc- ton from 95 cents to 70 cents per 1000 feet in the price of gas, with subsequent re- drctions depending upon the amount of gas consumed by the people of Birming ham, President J. S. Pevear of the Bir- mingham Railway, Light and Power com pany yesterday made his reply to the proposal of the city commission regarding the use of by-product gas in Birming- ham.
 MT. Pevear's counter proposal provides that reductions in the price shall be made at such times as the consumption of gas shall warrant, the city engineering and auditing departments to have access to the books of the railway company, and to be the judges of when this time ar rives The city's proposal called for an immediate reduction to 70 cents per 1000 feet, to be followed by a reduction to 60 cents one year hence, and a further re- duction to 50 cents two years hence.
 MEANS ANNUAL'LOSS
 In his reply to this proposition, Presi- dent Pevear points out that an imme- diate reduction in the price of gas to 70 cents per 1000 feet would mean an an- nual loss in revenue of S66000 to the com pany. The contract now in effect with the city does not expire until 1921, and the losses to the company on basis of 70 cents per 1000 feet would amount to $33o 900 in that time.
 MT. Pevear's communication to the com mission setting forth his proposal was copied yesterday afternoon and each of the commissioners received one of the copies. It is expected the matter will be taken under advisement at a confer ence of the commission this morning when some action will be taken
 MT. Pevear's communication follows:
 Hon. George B. Ward, President Board
 of Commissioners, City of Birming
 ham, Alabam ma B..
 Dear Sir: You and the city commits sion were good enough on Saturday, May 6, to suggest that if the Birmingham Railway, Light and Power company would offer, beginning with the distribu- tion of by-product gas, a maximum net rate of FOG per M cubic feet, with a de- crease in the net rates at the end of the first year to 60c per M, and further de- crease at the end of another year to soc per M, your commission would be agree able to accordingly amend the existing gas price contract and to repeating the existing ordinance so as to provide by the amended contract reduction in the heat value requirements from 575 B. T.. U. to a minimum of 525 B. T. U., and so as to eliminate the Illuminating requirements. The sliding scale to be adopted from these respective maximum rates was left to be fixed by this company in such form as in it's judgment would secure the largest possible consumption of gas for industria, purposes. This was with the distinct statement on your part that noth- ing done at this time would affect the situation beyond the term of the existing price contract.
 ''The above suggestion is within SC per M GU. ft of the offer made by this com pany in January, 1914 and this difference, on casual thought would seem to be neg ligible. It must however, be borne in mind that when this company made it's offer in January, 1914, 1t did so at the close of the year of the greatest pros perity which Birmingham and this dis triet, including this company, had ever seen, and that even at that time in mak- ing said offer, the company expressly stated that the same, left no trading ground but was the most liberal offer which 1t then could afford to make, with the optimism born of surpassing pros- perity which everyone believed was as- sured of a long period of continuance Contrary to the expectation of both the company and of yourselves, Birmingham has been passing through, in the last two years the period of acutest depression which it has known probably in 20 years
 DIFFERENCE IN COST
 ''No doubt your present proposition so closely approximating our original offer, appears to you justifiable in view of that experience, but that same experience makes it impossible for this company to accept the same in the form in which it has been presented. The actual facts are that the difference in cost in the holder of by-product gas after purification, and gas manufactured from our present plant, is between 10c and lie per M. The proposed immediate cut, therefore, will not only give to our consumers that en- tire saving, but will also involve in addi- tion thereto. reduction of nearly 15c per M, or slightly in excess of 15 per cent of our present gross gas revenues in return for which the company will receive no