The daily Gate City and constitution-Democrat. (Keokuk, Iowa) 1916-1922, 1916-12-21
MERGER WILL GUT
ELECTRIC RATES
This IL statement Made From 81,
Louis Companies In Connection i
With Reorganization
There.
POWER FROM KEoKUK
Company Which Has Hitherto Been
Geetins Profits From power
Here VIII be curbed.
It 10 Said.
POWER FROM KEoKUK


corning the consolidation Of COM
panies there, and a change In the
policy of the company hitherto buy
ing Keokuk power:
Charles S. Ruffner, recently elect
ed vice president Of the Union Elec-
trio Light and Power company, yes
terday made a formal statement re-
garding the pending merger OF the
Union company and the Electric
company of Missouri, explaining that
the merger will end the profit which
is now realized by the Electric COM
pany Of Missouri, which put the high
voltage Keokuk dam power into
commercial form for ST. Louis con-
sumers. The merger is expected
RHuf.ner said, to make rate reductions
possible. The statement follows:
sThe plans for the merger will be
submitted to the Missouri public
service commission for its approval
some time in the latter part Of jan
uary. Main outlines Of the plan
have been indicated, but so.1e minor
details have yet to be worked out.
The steps necessary to be taken to
satisfy all Acknowledgements are as
"The Union Electric Light and
Power company will take out re-
vised charter permitting 1t to do
business outside Of the city of st.
Louis, and will thereafter purchase
the property and business of the
Electric company of Missouri.
will be paid for its property and bust
ness in securities of Union Electric
issued for that purpose.
Amount Must be Approved.
"The amount to be paid Electric
company OF Missouri will be less
than the, total OF its outstanding Sc
curities. and must be approved by the
Missouri public service commission.
ION receipt Iof Union Electric's
securities in payment for its property
and business, Electric company OF
Missouri will retire its own secur-
tiles now outstanding and go out OF
business.
Union Electric. purchasing Elec-
trio company of Missouri. will. OF
course, take over its contracts. In
Guiding the Keokuk water power con-
tracts.
1.-THE merger has two advantages
for the St Louis electric utilities and
their customers:
T., II VIII IcUlONc~ SduSS VI
Misunderstanding with-regard to the
electric service situation in this city
and county.
Second, 1t means greater ease and
economy in the financing and man.
agement of the combined properties
conditions essential TO the contin-
iance OF our policy re rate reduc-
tons based on increNssd volume Of
business and on operating economies.
Same Stockholders sn Eoth.
Both companies are owned By the
same stockholders. Electric OF Mis-
souri, was organized to develop tie
electric service in the field outside
of st. Louis because Union Electric's
charter did not permit it to enter
that field Electric OF Missouri
the county company-was for that
reason utilized to contract for Keo-
kuk water power to be used in st.
Louis and the st, Louis district
1.-The st. Louis public has been er-
led to believe that the two
companies were operated by the
same owners solely in order that they
might impose an extra, intercompany
kuk water power.
AS hdItcI III DoOhhCCPihS lhCl
1y, to cover and account for the cost
OF receiving and Transforming the
high voltage Keokuk power into COM
form, Electric OF Missouri
his nominally charged Union Electric
a slightly higher rate for Keokuk
power than the rate paid by Electric
OF Missouri to the Keoknk company.
Low Rates Obtained.
"In actual practice, both companies
being owned by the same people,
and both being operated as nearly
like one organization as their separate
characters permitted, the customers
OF both have bought Keokuk power
at the lowest rates consistent with
the modest return on investment
permitted by state regulation.
"Keokuk power has been and is be-
ing sold to st. Louis and st. Louis
district users of 1t at rates lower
than those charged by electric COM
panies for similar power in any OF
the other eighteen large cities Of the
United States.
kuk, power were made before the
tract rates were based, chiefly on
the water power engineers estimate
Of what 1t was going to cost the Keo-
kuk company to produce and deliver
the power to Electric OF Missouri.
Those estimates proved to be err
roneous. The Keokuk company has
hod to expend many millions Of dol
lars more to develop approximately,
100000 horse power. of which ST.
Louis gets in round numbers two
thirds, than 1t expected to spend in
100000 horse power. The
facts are officially on record In the
Office OF the Illinois public utilities
st. Louie Rates Low.
a. raanlt st Louis users Of