Omaha daily bee., 1916-09-19
EIGHT PER CENT
TO LIGHT COMPANY
Commercial Club Committee
Makes Liberal Earning AL
lowance to Electric People.
COUNCIL REFERS REPORT

In the absence of J. A. Sunderland,
chairman of the special committee OF
the Commercial club of Omaha on
electric light and power rates, Fran
els A. Brogan, member of that COM
mittee, presented to the city council
committee of the whole partial re-
port of the operations of the Omaha
Electric Light and Power company
from 1889 to 1915.
Explanation was made that another
expert will be engaged to determine
schedule of rates. the company
should charge, based upon the find
i1gs of the engineers and accountants
who have been at work for year.
The gist Of the partial report is
that the committee finds that fair
investment valuation of the light
plant is $4769,506; that s per cent
return on that valuation should be al
lowed, this amount being 1881 ,560.48
and that under the schedule of rates
in effect August, 1915, the committee
recommends a reduction OF $8O0OO a
year from the total revenue. The
committee makes no attempt to sug-
gest how this proposed reduction
should be applied to the present
rates. Another expert will be engaged
for that part of the work.
Valuation and Earnings.
Commenting on the valuation fig
ures adopted by the committee the
report reads: But we have conclud-
ed that the valuation og S4,769,50o is
not unfair to the company and its
stockholders, and constitutes a neces-
sary reduction from the values
claimed by it and from those recon-
mended by the experts, in order to
do justice to the consumers OF the
company"
The valuation total mentioned il
divided as follows: Physical value OF
plant, $3,194,6S0.58; working capital,
$241 ,2oS.20; development expense,
S75O,0OO; amount in depreciation re-
serve, $583,52S.
On the subject of reasonable re-
turn the report reads: I'VE find that,
beginning with June 80, 1915, and for
a reasonable period following that
date, until conditions shall have
changed, as may be hereafter deter
mined, reasonable rate of return
to be allowed this company on the
amount of its investment is 8 per
cent per annum on the invested capi-
tai; that is to say, 8 per cent on $4,-
769,506, amounting to an annual re-
turn of $38l,560."
The committee finds that when the
company stopped installation and re-
newal of incandescent lamps there
was an annual addition of $4,000 to
revenues of the company During
the year ending June 80, 1915, the le-
gal expenses of the company amounts
ed to $73,53l, referred to as extra
ordinary"
The city council accepted the par
tial report OF the committee without
comment, referring the documents to
the city legal department for perusal.
Not Binding on City.
he COUNCIL has tdkcll luG pOSitloll
that the findings Of the Commercial
clubs special committee have no
binding effect upon the city, but the
information offered by the commit.
tee will be considered for what it may
be worth.
The personnel of the. Commercial
clubs committee is: J. A. Sunderland,
F. A. Brogan, F. J. Harrington,
George H. Kelly, F. S. Knapp, T. J.
Mahoney, F. H. Meyers, H. A.
Thompson, ]. L. McCague and w, S.
Wright.
Rate Ordinance Goes Over.
The city council referred for
another week Buffers 6-cent electric
light ordinance, with other docu-
ments relating to the electric light
situation. Commissioner Jardine an
nounced once more that he would
vote 70 6-cent ordinance, provided
that the city blocks the rates i'll the
ordinance. Corporation Counsel
Lambert and Commissioner Butler
maintain that the city should fix the
primary rate at 6 cents and let the
light company do its own blocking OF
rates.