Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1922-05-01
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MERIT {. SYST IN
OUTLINED | n z FOR
!, ! UTILITY FIRMS


RtunaIck. q. p ,MAy1.--A merit
System Al s6ver1ning the rate of, res
turn uponkasinlyestmsnt OF public utiK-
tsassis opthned ~ the. states railroad
coMmissdon Iii ADHESION handed down.
insthe matter of rates charged BY the
NortAhernsstates Power company Of
while holding that 8 per cent upon
investment 10 a~,reasonable return the
coramisston's finding In this, ase says.
that b commission has held in
MISUNDERSTANDING that the. rate OF q
turn must be Eoyerned BY the ctrcum-s
stances surrounding each case" 1t
adds that in this caseait il shown that
I'm the past coH OF operation has been
excessive but that the evidence shows
chtnery which will affect great econ
onies in operation. Due credit is Civ
ems. It is stated, to the installation of
machinery which will reduce the cost
Cooperation
Other important general policies in
tlllity rate practice are outlined, in
the. decision. The commission holds
that a supervision charge made by the
main Office of a utility corporation
which has branch plants must be
based upon the service performed and
not an arbitrary charge. This point
has arisen in several North Dakota
rate cases regarding telephone, cleo
tric and other plants that are owned
by corporations which may operate
utilities in several states.
The Northern States Power COM
pany maintains general offices in
Minneapolis and ID a branch Of a Chi
made in the operation Of the Minot
utility for the; Minneapolis Office and
for the Byllesby Engineering and
MANAGEMENT Corporation Of Chicago.
Tor engineering, supervision and 9TH
er services The charges included 7A
per cent on2cost of all new construc-
ton and ~ per cent earnings
Tor supervision. a :
."sIf any charge. is allowed 1t must
be based upon actual services per-
formed, and not arbitrarily fixed up
ohaa percentage OF all gross earnings
ofEthe company" the commission nys
in its decision. SSS 5&
Would Regulate Supervision Charge.
1T holds that the supervision charge.
which has been a. debatAble question.
ISL, valid charge as a general propo-
edtion, but should be based In amount
upon specific services In the Minot
services were not reflected in reduced
rates or more efficient services and
says 1t will consider thesservaces ron
dered by the Byllesby corporation vo.
1Vatary contributions justified by reA-
sop Of it's stock ownership ana control.
: An fixing the mount allowed for
depreciation the coramissionEs held 4
3 oent Of derrectabie+er.otrsc ana
StAam property and 6h per cent of
deprectablei telephone property. Of the
utility should be allowed@to be taken
al Of in the rate charges.
With regard to the method OF. val
nation. whtchasalso has been aa7debat-
able question: the. commission says II
has adhered toETthe historical original
cost plan. va1uing the plant at the ac-
tual cost at time Of installation, or
certained to strike an average W q
ten-year period. Utility companies
hold this is an unfair method Of val
uation and is not followed generally
in, other states Mhbre 4 valuation ID
based upon what it. would Q to 70
produce the plant.ss The engineer for
the utility basel his valuation upon
a fivelyear speriod.fss The commission
holds the North Dakota law does not
permit it to value q plant Il any
method other than the historical orig
1nal cost method:
some Rates Out.
In the Minot q the commission
reduced the electric and steam rates
and left the TELEPHONE rates the same
for the citr...of Mineta and other towns
served blythe Northern States. Power
company. 1t fixed sthe vaiue-sofS the
property at $7a4:0377, which includes
working sc~apitalsAnd EoinsN value. New
rates are; established3fo mi year ef-
fective May ~, 1922. The electric
lighting rate Is; reduced from 10 cents
to II cents for. the first 100 kilowats,
other rates inI.proportton.. The cleo
tr1c power rate, which was s cents foy
the first 100 kilowats and a lower
rate thereafter, ia fixed It Scents for
the first 200 kilowats,s and a lower
sliding ecale thereafter. Steam heat
ing rafes arc reduced from $3.50 for
the first 10000 pounds condensation
to 100 for the first $4,000 pounds
condensation, and lower rates for
greater users.
sir Hail Canes writing is 20 bad
. 49, - hSo rkHi~A $-.-~y