The Pleasantville press. (Pleasantville, N.J.) 1912-1929, 1921-08-20
GAS CO. REFUSED
RATE INCREASE
"UNJUST AND UNREASONABLE"
SAYS PUBLIC UTILITY COMMIS-
sIoN-REvIEWS TESTIMONY IN
LENGTHY DECISION.

In a decision handed down last ffl-
day, the State Board of Public Utility
Commissioners refuses authority to
the P~leasantville Gas Company for
further increases in rates, on the
ground that advances petitioned for
are unjust and unreasonable"
The company has been charging 81
a thousand cubic feet with an addi-
tional service charge of % cents. 1t
sought to boost it's rates to $2.75.
AT the hearing on the petition held
some weeks ago, residents all along
the Shore Road, covering the munich
palities of Pleasantville, Northfield,
Somers Point, Linwood and Absecon,
declared the service and quality or
gas was poor.
A summary of the report shows that
the Board disallowed certain items IN
the company's estimated cost of serv-
ice, as follows: Depreciation, $3.50;
excess cost of fuel and oil, S1,S00;
general and miscellaneous expense,
81 1000. The company's claim OF prev
ious losses of $27,500 has been re-
duced by the Boards estimate to $780,
S54, and instead of permitting the
company to make up this loss in n
year, the Board permits them to do SO
in three years, although it anticipates
that with the falling prices this may
be accomplished in eighteen months.
This indicates, in the opinion of the
Board, that the present rate is fully
adequate not only to provide for cur
rent costs, including interest on
bonds, but to amortize past losses of
the company.
The Decision.
The decision in part declares:
The petition alleges: That the cor
poration is a reorganization for the
benefit of the bondholders of the At
lantic City Suburban Gas and Fuel
Company, the property having been
purchased by a committee represent
ing a large majority of the persons
holding bonds against the property of
said company;
That the rate now charged for gas
is 50 e thousand cubic feet, estab-
lished by order and report of the
Board, dated August 4, 1920, together
with a service charge of 25 cents per
meter per month;
That in order to produce sufficient
revenue to pay operating expenses
and provide adequate return upon the
value of the property used and useful
in the conduct of its business, an in
crease in the rates from 81 to S2.75
per thousand cubic feet is requisite
and necessary; that the company pro-
poses said schedule shall become eff
fective May Is, 1921;
That the reasons for asking such
increase are that the taxes levied
against petitioners property are ap.
proximately $1,000 per annum, which
is a material increase over the as
sessments payable when the present
rate was established; that there Is an
increase in the cost of bituminous and
anthracite coal since the rate was
fixed; that the property has been OPP
Grated without expensive salaries and
overhead; that since the month of
November, 1919. during which period
petitioner has operated the plant,
there has been a net operating loss
to December 81, 1920, of $13,533.31,
without allowing any return upon capt.
tai invested.
The proposed effective date of the
schedule of rates was suspended to
tn 18th day of August, 1921. Due nc
tice was given of the time and place
of the hearing and the municipalities
interested were duly represented by
counsel.
Value of Property.
Upon petition of the Atlantic City
Suburban Gas and Fuel Company, a
predecessor of the present company,
for increase in rates, the Board fixed
a value of $250,000 on the basis of re-
production cost now less depreciation
accrued. The property of the com.
pany, however, was sold to a COM
mittee representing the bondholders
at public sale for $50, 900, as shown by
testimony. The par value of the
bonds. however, was 500, 900. and the
additional costs were stated by the
president of the company, in the testi.
mony of July 6, 1920, as follows:
1--WE lost the interest, the 800, 900
principal, with interest up to the pres
ent time, amounts to about $4,000
and over and $14, 900 brings it. up to
$125, 900, that it stands us in at this
time" (That is, as of July 6, 1920
During the course of the hearing in
the instant case it was stipulated that
s125, 900 should be taken as the basis
for rates in this proceeding.
The representatives of the company
and of the municipalities both used a
return of eight per CEN in calculating
the cost OF service
Operating Expenses and Taxes.
During the course of the hearing
the company did not submit a detailed
estimate of the operating expenses
and taxes for the year beginning Au-
gust l, 1921, but in it's brief the COM
pany does append such a statement.
The engineer representing the munich
palities submitted a detailed estimate
of the costs of rendering service on
the basis of sales of 40, 905, 800 cubic
feet of gas and on the basis of the
manufacture of SIS, 1855, 900 cubic feet of
gas. The amount manufactured is
based on there being lost or unac-
counted for 26.5 per cent. of the gas
made. These same figures for sales
and for unaccounted for gas were used
in the table appended to the brief of
the company.
In view of the testimony in the case
that the leakage has been brought
down to 20 pei cent. (Which is still
high, it would appear that the
amount of gas to be manufactured
should be corrected accordingly and
the cost of fuel and oil in both esti-
mates should be reduced to the extent
of 4.55 per cent. to correspond with
the present operating conditions of
the plant. In the company's brief are
included not only the current costs for
operating the plant during the year
beginning August I, 1921, but some
$27, 800 of losses alleged to have been
incurred in the operation of the plant