The Birmingham age-herald., 1920-06-06
Ross Urgently Advises Use of By-Product Gas at Once to Avoid Increased Rates
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 the use of Tennessee Company by-prod- uct gas is giving satisfaction to the Fairfield customers of the receiver. Since the use of by-product gas was begun, the consumption has increased out of all proportion to the difference in heat units between by-product and manufactured Jas, and so far as I have been able to ascertain, both the officials and the citizens of Fairfield seem to be satis. fled.
 ''The mayor of Fairfield stated that prior to the introduction of by-product gas the service was considered So in- different that few relied upon it and that comparatively little gas was used, whereas, under the present conditions the service is dependable and gas is used extensively.
 "This general condition is supported by the fact that during the first month of the use of by-product gas before the citizens of Fairfield became accustomed to the improved service resulting from it's use. only one million feet of by- product gas was consumed. Within few months this consumption increased to two million feet.
 sIn accordance, therefore, with your request for my opinion in the matter, have no hesitation in asserting that the public service would be furthered der existing conditions by the substitu-
 
 is. in my opinion, more certain because of your pending consideration of the entire public utilities situation. The re- suits of the receivers gas department operations for the year 1919 show that production and operating expenses were about equal to income, if a normal al- lowance is made for depreciation, leaving only nominal amount-approximate s10,OO0-to represent return upon the value of the investment If per cent were charged against the operation to represent fair return upon the approx innate value of the gas plant and sys- tenn, 1919 operations would have re- suited in a deficit of approximately $780, 000-s170000 in the gas department.
 AVOID EXPENSE
 Production expenses must materially increase after the termination of the re- cever's current contracts for gas oil on August i; and unless the use of by-prod- uct gas is authorized the deficit in the future from gas operation will be so material. in my opinion, as to interfere to a marked degree with the re-organi- zation of the property on the sound basis which you are now considering. My recommendation is, accordingly, that the receiver be authorized to conclude his negotiations for an assured supply of by-product gas and to proceed inn mediately with the work of construction necessary in order to receive the gas from the Tennessee Company.
 AS suggested these conclusions are entirely consistent with the tentative report upon the entire utilities situation which will be submitted shortly in the light of eight months operations on a 6, cent fare I assume that the question of the amount of the reduction in price which should accompany the substit,l- tion of by-product gas for manufactured gas would be dependent upon the basis of the companys reorganization and it's revised relation to the city. It would also be dependent to some extent upon a practical test of the substitution, such as you put into effect the cent fare agreement. q mention these details as a basis for the suggestion that the question of price revision should be reserved by the city so that it's determination may not be permitted to delay the action neces- sary to assure the of by-product | gas by or before August | Respectfully yours, l. ". ROSS"