The Birmingham age-herald., 1922-12-17
Consulting Engineer Says Original Cost Figures in
 Commission Order Credited to Him Do Not Appear Any
 where in His Report
DRASTIC RATE REVISION UPWARD IS HIS FORECAST
Following Engineer AIdridge, He Is Second Expert to Come Out Publicly Against Tentative Valuation Put on Alabama Power Company

I. F. Mcdonnell, consulting en- gineer of the Alabama utilities com mission, Saturday, in statement issued to The Age-Herald, repudiat- ed figures credited to him in the brief submitted by Associate Com missioners B. H. Cooper and S. P. Gaillard of the Alabama public service commission.
 Mir. Mcdonnell furthermore gave warning to the public that should the commissions tentative valuation be made final, under the law of Alabama which permits . utility to earn fair return on valuation, to provide the customary return al- lowed by the comsssion, it would require revision upward of exist ing rate schedules of from 25 to 30 per cent.
 The statement bristles with criti- cisms of the order prepared by the associate commissioners.
 MT. Mcdonnell pointed out that "conclusion reached by the com mission on value of s33,843,252 is ton comparable basis) higher than the present value reached on reproduction basis by any engineer 1 that filed a report in the case.
 Charges Valuation Unjusdfied Briefly stated her are the high lights of MT. McDonneli's statement; ! That conclusion reached by the commission on value of s3s,s43.252 is | Con q comparable basis), higher than the present value reached on repro auction basis, by any engineer that | filed report In this case.
 That the price basis used in the reproduction cost estimates Beverage prices prevailing for the five year period. lel5-ts2o inclusIve). is higher than in my judgment can possibly be justified fused as a controlling fac- tor In arriving at this value. and this 1 has evidently been done in this case Il ''It is even higher than the claims | of the Alabama Power company's ex l parte statement of original cost, dated September 1, less undeveloped 1 water power, which the order states were excluded
 That should this valuation be i final, the power company, under the law, would be entitled to earn a l fair return on this valuation. To l provide the return customarily al- | lowed by the public service conmis- 1 sion. would require a revision up ward ofsexisting rate schedules of 1 from 20 to 30 per cent.'A'f
 Sees Excessive Valuation Engineer Mcconnell pointed out
 that his conclusions accompanying 1 his report to the utilities commission
 were not given in the Cooper -t;ail- lard order announcing their ten-
 tative valuation. He said that the
 most liberal" of his conclusions as submitted on original cost studies of 1 Alabama Power company property
 was s22.421.000. not including .'nde-
 veloped water powers deducted to 1 make his report compare with the
 commissions order bringing his fig | ures down to $21,239,331. or over
 twelve and one-half million dollars under figures of the Gaillard-Co Cooper
 tentative valuation order. His re- ! port was filed with the commission 1 on June 1. 1922.
 Mir. Mcdonnell, an engineer em-
 ployed by the commission for the ostensible purpose of supplying the state body with facts to guide them ! in setting valuation of the utilitys 1 property. also pointed out what he 1 termed certain inconsistencies to 1 the commission in the original cost 1 statement filed by the Alabama Power company on September 1. 1922. { He added that he was ready to point
 out differences in conclusions con- tained in the two original cost state tCo-tfnued on Page Two.D