The Powder River County examiner and the Broadus independent. [volume] (Broadus, Mont.) 1919-1935, 1921-07-08

IoSAOu, anu SAoA0POA W NAS
companies under actual market con-
ditions which must determine to a
very considerable extent the reason
ableness of any rates to govern the
traffic. Positive knowledge of in
vestments and property values and
assumptions concerning fair re-
turn" thereon are of little aid with
out the third factor of operating ex-
perience, nor will such known ele-
ments help at all in determining such
third factor. Our action herein, then,
must not be accorded even those
qualities of relative finality which
attend the disposition Of the ordinary
public utility rate proceeding.
Not Justified
ION the facts now in our posses
sion we do not find anything to JUS
tify spread of TN cents between
the rates proposed by the carriers.
Giving full force to the difference
in their respective investments, to the
added efficiency in service which the
Elk Basin corporation may offer at
present because it is more nearly a
going concern in the operation of its
pipe line and perhaps possessed of a
AAOAS CAPOA ACANCO AOANCs " kAC pAS 81
cal capacities of the two systems, to
the terminal loading service of the
Independent company, in short, to
every feature that distinguishes one
company from the other, We are at
q loss to discover in any one of
these features, or in all of them ag-
gregated, basis for the spread as a
result of their independent filings.
1T now seems reasonable to in
dulge the presumption that both COM
panies are bona fide competitors for
carrying the crude petroleum of the
Cat Creek field, and this being so, it
must be remembered that the con-
ditions under which they are oper-
ating are practically identical. so
much SO that slight difference in
the rate would work to prefer the
carrier operating at the lower rate.
if it would not actually destroy the
carrier charging a higher rate. AS
Stunning bona fide competition, free
and unrestrained, equal ability to
render service. and this seems plain
at the present stage of oil production.
the only essential difference between
the two companies is their ability TO
sell their services, personal factor
with which we are not engaged. To
sanction a difference in rate made
by public authority. would be to ig-
more the reality of the Cat Creek
situation.
Convinced that rates for each car
rier should be the same, We have
very little evidence, as noted above,
to move us to a rational judgment as
what thnco cho,,1I no
thing seems fairly clear from the rec
ord, however, and that is that the
10 cents now proposed by the Elk
Basin Consolidated Petroleum COM
pany can scarcely be denominated
reasonable, if the company's pipe line
operations are to be divorced from its
producing activities, and that is what
we must do. The secretary-treasurer
of the company testified at the April
hearing that the inter-company
charge at that time was Is cents
barrel, package charge added to
the field price: that the actual cost
of transporting the Oil was shown to
be 14.98 cents per barrel. and that
the 3 cent charge did not include
anything for taxes. or for return on
the investment, and Welded but
S34.2O above operating expenses
from the time when transportation
was commenced in August, 1920, to
December 81, 1920. In other words.
such charge was bookkeeping ar
bitrary adopted to meet operating
expenses and depreciation of the pipe
line. which was simply private IA
cility of a group of companies engage
ed in unified production. transporta-
ton, refinement and sale of petro-
ieum. The same witness was at pains
to emphasize that the Is cent rate
is an inter-company charge, and that
rate is entirely insufficient for a
company or business seeking any
sort of profit. and again. that such
rate was inadequate and unreason-
able. The superintendent of the
Elk Basin company's pipe line was
equally positive: You keep charging
the same rate Us cents) and l don't
think the line will ever make any
profits
Condemned at Source
Without dwelling On the implica-
lions fairly deducible from the propo-
sal to extend what is an admittedly
insufficient charge for private oper-
atoms to public operations, this board
feels that the Is cent rate is suffi-
GENTLY Condemned at it's source, to
warrant its rejection now as unWor-
tiny OF trial. We shall adopt the 32h
cent rate for both companies not be-
cause we feel positive that it is fair,
per Sc, but because it more nearly
approaches that standard of fairness
which entities it to actual trial. If
comparison of pipeline rates in oil
fields characterized By the same con-
ditions as obtain in the Cat Creek
field. is of any value. it is noteworthy
that the 3212 cent rate, amounting
to OLA per mile, is lower than rates
for lines of approximately the same
mileage in like Wyoming fields. For
example. Usage field. .0213 per mile
per barrel; Mule Creek field, .017S
per mile per barrel Rock Creek
field. .o2 per mile per barrel.
I'VE note that the regulations filed