Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1922-05-01
MERIT SYSTM'
OUTLINED FOR
UTILITY FIRMS
Railroad Commissions De.
clsion in Minot Power Case
r Reaching.

6ls1narck. N. D. May IA merit
system IN governing the rate Of re-
turn upon, investment of public utili-
ues is outlined by the state railroad.
commission in a3decision handed down
ln.tne matter of rates charged. BY the
Minot. - w
Wnile holding that 8 per cent upon.
investment ls g reasonable return the
Sonmisston's finding in this case says
enat this commission has held In
previous decisions that the rate Of .
etances surrounding each case" 1t
ADDS that in this case 1t is shown that
IN the past cost of operation has been
excessive but that the evidence shows
@nat the company has installed ma
chlnery which will affect great 8
ofnles IN operation. Due credit is Civ
en-, 1t IS stated, to the installation Of
machinery which will reduce the cost
of operation
Other important general policies in
uallly rate practice are outlined in
the, decision. The commisston 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
mas arisen in several North Dakota
rate ases regarding telephone, cleo
trlc and other plants that are owned
by corporations which may operate
utilities in several states. q
The Northern States Power COM
pany maintains general offices in
Minneapolis and is a branch Of a Chi
cago company. Various charges arc
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 Inc 9TH
er services. The charges Included IN
per cent on cost of all new construc-
ton and ~ per, cent Gross earnings
tor supervision. "
III any charge. is allowed It must
be based upon actual services per-
on a percentage of all gross earnings
Of the COMPANY" the commission say
in, its decision. ;.
Would Regulate Supervision Charge.
1T holds that the supervision charge,
which has been a debatable question,
is,a valid charge, as a general propo-
sition, but should be based in amount
upon specific services. In the Minot
case the commission holds that the
services were not reflected in reduced
rates or more efficient services, and
dered by the Byllesby Corporation vo-
luntary contributions justified by reA-
son Of it's stock ownership and control.
In fixing the amount allowed for
depreciation the comn isetonS held 4
paF cent Of derreciabt6- electric ana
steam property and 5h per cent OF
~deprectablel 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. which also has been asdebat-
able quest on..s the commission says II
has adhered to 1.-THE historical original
eos plan. va1uing the plant at the &C
tual cost at time Of installation, OF
when the actual cost could not be as
certained to strike ar average owe q
ten-year period. Utility companies
hold this is an unfair method Of val
uation and is not followed generally
in: other states, where valuation IL
based upon what it would cost to 70
the utility based his valuation upon
a five-year period. *A The commission
holds the North Dakota law does moi
hermit it to. value a plant ~ any
method other than the historical or1g.
inal cost method
Some Rates Out.
In the Minot case the commission
reduced the electric ana steam rate.
and left the telephone rates the same
for the city. Of Minet and other townt
served by the Northern States Power
company. 1t fixed the vaiue-tof the
property at $7a4.037, which includes
working capital and going value. New
rates are established for year ct.
fective May II. 1922. The electric
Z lighting rate is reduced from 10 cents
to II cents for the first 100 kilowats
other rates In proportion The cleo.
trio power rate, which was s cents 70,
the first 100 kilowats and a lower
rate thereafter. ia fixed at Scents 70,
the first 200 kilowats, and q lower
sliding scale thereafter. Steam heat
Ing RATS are reduced from $3.50 fol
the first 10000 pounds condensation
to 81. 90 for the first $4,000 pound:
condemnation. and lower rates 70,
greater users.
SIR Hall Gaines writing is 10 bes
that his publishers employ specfa
compositors who have made . loni
rt,,ar ~ +ho faraona n0velfat'A manu-