Evening star., 1921-01-27
D. c. PHONE RATES
HOLD UNTIL AUG. |
Company Advised to Dis
pense With 800 Out-of-
Town Operators.

The Public Utilities Commission to-
ing telephone rates until August l.
The commission expresses the be-
lief that economy would result if the
company would dispense with the ap-
proximately 800 out of-town operators
now in its service. This force. the
commission states. costs the company
S2oe.ooo more year than the cost of
mai Intaining a similar number of local
girls would be-
The decision follows:
Following the receipt of the pend
Ing petition, the commission held a
formal public hearing thereon, after
due notice, on January Il, 1921, at
Whlch time the petitioners presented
statements showing the effect of the
new rates upon it's revenues and the
result of its operations for the six
months from June ], 1920. to Novem-
Der 30, 1920. The company also pre-
sented evidence to show the changes
that nave taken place in the value of
the property used and useful for tele-
phone operations within the District
OF Columbia during the same period.
IN order to determine the fair value
OF It's property of November 80
l3Zo, the company presented three
plans, prepared in the manner used
IN the former case in May. 1920. For
the purposes of this case the commits
sion Will adhere to the third method
Whlch II used in arriving at it's de-
c SION in the previous case namely
that 1t should add to the fair value
ascertalned by it as of December 81,
1910, the amount actually expended
by the company since that time, less
the retirements and the value of the
property admitted by the company to
be no longer used and useful, to-
gether with further reduction for
the increase in capital paid for ont
OF earnings. The allowances for ma
teriai and supplies and working cash
are the same as the commission used
IN its order Of May 26, 1920
Still on Company'x Books.
The evidence shows that tne
amount of s1.S4992314, which was de-
Quoted from the capital accounts
representing property still on the
books of the company. but not us..d
or useful on December 81. 1919. has
been reduced to s1.3l350623. the dir
ference tSo36.422.9D representing
properly that has since become use
fui or actually removed from the Cant
tai accounts. The evidence also shows
that the increase in capital paid for
out of earnings is s1.023, ,73704. on
this basis the tentative fair value of
the companys property, as of Novem-
7s9290.1S
The statement of revenues and ex-
pendltures during the six months end
ed November so, 1929, as submitted
Dy the company, shows a net operat-
ing income according to the books of
s25o.c11.26, to which certain adjust
ments are to be applied reducing the
net income to $226.25O.73. which, mul-
tlpned by two, would give net in
come on an annual basis of Sl52.5o1 46
The. company stated that these adj
Justments include the effect of a nro-
posed new schedule of rates of de-
probation retroa ctive to January l.
1870. somewhat lower than has been
used in the past. which would reduca
the expense of depreciation during
the SIX months period by approx
mately $4,000, or on an annual basis
by $4,000.
AS stated by the commission in
it's order of May 26. 1920. the matter
OF the proper annual rates of de-
probation to be applied to the prop
erty of the petitioners is a point of
difference between the commission
and the company. on which several
public hearings have been held The :
action of the commission in this case
is not to be taken as approving the
new schedule of rates of deprecia-
ton. that question being at issue in
formal case No. 81.
The estimated annual net income
available for return as given above,
namely. Si52.501.46. will give a rate
of return, of 1862 per cent on the
tentative fair value of s12, 500. 900
fixed by the commission as of De.
cember 81, 1919, or 353 per cent or
the tentative fair value of S127S9,-
290.1S as of November 30, 1920.
From statistics prepared by the
company. it appears that the annual
cost of operation per station is con- !
Siderably higher than the cost in 9th
err cities. Part of this increase is be- i
lieved to be due to the employment
by the company of about three hun
dred out-of-toWn operators. These /
out -of-town operators are maintained !
by the company at an annual expen- |
diture of approximately 100000 in !
excess of the cost of maintaining an |
equal number of native operators. !
Though the company claims that this |
increased cost is largely offset by |
their increased efficiency, the COM
mission is of the opinion that econ |
omy will result if the services of |
these out ut-of-town operators are dis |
pensed with.
after careful consideration of the |
evidence, the commission is of the |
opinion that the present rates for tele- |
phone service should be continued for |
a further period Of six months"