The Bismarck tribune., 1919-03-27
HEAVY EARNING
SHOWN FOR GATE
CIT UTILITIES
During Last Six Months Net
Profit Has Gone as High
...... as 20 Percent
GRAND FORKS RATES RIGHT
AIthe No Lower Than FargO's.
Overhead Expenses Are
Much Heavier
GRAND FORKS RATES RIGHT

That the Union Light, Heat &
Power Co. of Fargo during the last
six months earned 20 percent net on
its electric business. twelve percent
on it's steam heating and seven per-
cent on it's gas had been established
by the state, Assistant Attorney Gen
eral +. e. Packard claimed, in con-
cluding last evening the first import
ant public utilities rate hearing held
before the railway commission under
the New North Dakota public utilities
act
The states experts testified that
the same rates were charged by the
Grand Forks division of the Northern
States Power Co, but that because
Grand Forks was "Over equipped for
the number of consumers served.
which Is considerably less than the
patrons served by the Fargo company.
the net return was not unreasonable.
The state made the contention that
Grand Forks consumers were paying
for more equipment than was neces-
sary to serve their field. and that
while the Northern States Co. must
have the revenue it is now receiving
to net it reasonable return upon it's
Investment, Grand Forks does not need
as large an investment in public utili-
ties as the Northern States Co. has
given it. Grand Forke has, it was
brought out two complete plants
where one would suffice.
For the whole Of the year 1918, bas-
ing half of the year on the old rates
and half on the increased rates which
resulted in the protest that finally
brought the utilities before the rail-
way commission. Hagenaw e Erick-
son, engineers mad accountants who
made the utility survey for the state,
showed that the Fargo company's net
earnings were 954 percent on it's en-
tire plant; 15.45 percent on electric
ity; Alp percent on gas and 10 "a
percent on steam. On the Grand
Forks plant the whole net earnings
were shown to be 3.9S percent on the
present value, divided as follows:
Electricitv all parGent ,eas, ssssN s2ssN ner-,
cent, and with net actual loss Of $3,-
059 on steam. The Northern States
Co. experts testified that the net earn
ings of the whole Grand Forks divi-
sion were but $50 percent, electricity
being credited with ABS percent; gas
with l.S4 percent. and steam with a
sos percent loss.
Considerable time was devoted to
an effort to establish a fair rate Of
net returns. Engineer Hagenaw con-
tended that eight percent was suffi-
cient, Robert F.. Pack Of Minneapo-
lis, vice president and General Mana
ger of the Northern States Power Co.,
Of which both the Red River utilities
are subsidiaries, insisted that ten per-
cent was necessary to cover all inter-
est and divident accounts. Thi asgain
brought up the question of over-valu-
alton ,and Hagenaw 4 Erickson placed
their experts on the stand to break
down the corporations contention that
they had undervalued the property
in the survey made a year ago. On
cross examining Engineer Rittenhouse
who gave expert testimony for the
Northern States Co., Engineer Hage-
nav made an effort to establish the
fact that the company was charging
too much to depreciation and replace
ments, and that a large portion of
such charge each year went into a
reserve which was becoming top
heavy He declared rates which would
provide for such an apportionment to
depreciation and replacement were
higher than necessary.
The question as to whether the Far
60 and Grand Forks utilities. should
be considered as one unit, or whether
they should be divided into depart
ments and each utility be required to
was made unit, with the company
support itself from its own revenues,
cOntendng for the plant unit basis
and the state insisting upon a separ
alton Of the several units, with each
department carrying its own load ana
department to make up deficit in
not calling upon consumers in one
another Of which they might not be
patrons.
The new rate schedule, effective
last July. is eleven cents net per
kilowat for electricity, and two dol
lars net on gas. Price to July I the
rates were S:S cents and s1.4S, respec-
lively.
At the conclusion of the arguments.
the rail board announced it would take
the matter under advisement, render
ing it's decision at the earliest pos
sible date.
Immediately after the disposal CT
A..
Frank E. Ployhar brought up his ap-
plication for a 50-cent increase in
rates for the Bismarck Gas Co., OF