The Birmingham age-herald., 1923-01-11
KiIby.s Message.

NIONeTnOT hlIpS nlSSSd6S for an investigation of the valuation decision of the associate public serv ice commissioners on the property Of the Alabama Power company follows: ITO the Legislature of Alabama:
 Tn connection with the duties de- volving on me in the general super vision of all departments of the state government, my attention comes to the public service commission.
 The legislature placed upon the commission under the Alabama pub lie utility act of 1920 greatly enlarged powers. duties and responsibilities in the control and regulation of public utilities. One of the most important and responsible of such duties is that of finding and fixing vafuation of the properties of the several utili- ties as basis for fixing their rates.
 .I find that in the case of the larg- est utility in the state, the Alabama Power company, majority Of the commission consisting of the two as- sociate commissioners, undertook by an order issued by them on Decem- Der 13 1922, to give the property of such company valuation for rate making purposes in the sum of s55,- S43.252.
 "An inspection of the record in this proceeding shows the following:
 First: That, leaving out of con sideration the undeveloped water powers, which the associate commits sioners say in their opinion were not included, they have placed on the property of this company a value in excess of that found by any of the several consulting engineers em- l ployed by the power company itself, and in excess of the figures con tained in the power company's own statement of cost The president of the commission, its consulting engi- neer and it's accountant, vigorously protested against this action on the ground that the company had never l furnished for their examination and analysis all of the original records showing the cost of it's property, al though demand had been made for such records in accordance with the 1 law.
 Challenges Basis for Figures.
 "The company's own statement shows that the total cost of labor, material. etc., of their properties was l $17,095.926. There is no sound basis on which the two associate commis
 sioners could have added the differ ence between this cost of the physical plant in such sum of $17.095.926 and the valuation which they fixed of s33.s43,252, except for intangibles, going concern value, developed water power and certain overhead expenses which the power company contends is not included in the property ae- count <on their books. The commis- sion's accountant, under oath, shows that although demand for such rec ords had been made, the company has never furnished it's original records to substantiate the company's claim that it's physical plant covering such total cost of labor, material, etc, is justified, and that such records do not, include more or less of those suniss claimed in addition for intan- gibles, for which intangibles the two associate commissioners must have allowed in excess of s16.000.000. It stands to reason that neither the commi ission's accountant nor the i icommission could determine what sum claimed by the company for such iintangibles should have been prop erly allowed, unless and until the eommi isslon had been given access to the companys original records show ling all original entries as to what constitute the& sum of sl7,oe5,s2e I claimed for the physical plant.
 Capitalizinc National ResOurees.
 "The associate commissioners al- lowed for such intangibles, among other things, the sum of s24le,652 for l developed water power. That is an 1 allowance over and above the value of physical property and plant and represents the value of the water power rights. which amounts to the company being allowed to capitalize the natural resources of the state, on which the consumers will forever be compelled to pay return.
 These and many such similar ] things are such as to lead me to the conclusion that the valuation named | by the two associate commissioners has been fixed without having before
 them all the evidence which the law requires, and without due regard for the requirements of the law applying to such cases, and that allowances of value have been made by them which are not justified.
 Second: That the power company had not, in fact, made all such rec ords available for examination and analysis by the regular engineer and accountant of the commission, who are employed by the state. The state engineer and it's accountant stated under oath before the commission On December 12. 1922, the day before this order was issued, that certain ledger of the company on that day
 produced, had never before been made available to them, and that on
 that occasion they were scarcely all lowed by the cGmpany's officials to get more than a glimpse of such rec ords over the shoulders of such of fieials; that as soon as the company had made a technical production Of this ledger before the commission, and without time or opportunity thereafter being given for the state's co IT a n to examine and analyze this record and to require the production of the original journal entries behind the ledger which the ledger itself
 showed did not exist, the company's
 officials bundled up such ledger and
 carried it away with them; that the associate commissioners on the fol-
 lowing day issued their order while
 the states accountant was in Bir-
 mingham under the orders of the
 president of the commission, trying l still to get access to the company s
 records. The ledger of which the com
 mission and it's experts were given
 little more than a birdseye view. con
 tained six ledger entries which to-
 tailed over s16,000,000, all of which
 the company was insisting should be
 taken as a part of the value Of their
 property to be fixed by the commits sion. Such ledger entries, like the
 usual ledger entries of other busi- ness concerns, did not show nor set out in detail what items of property
 they covered, but did show, and the
 cCmpany's president and treasurer
 admitted, that there were behind
 these entries original or journal voucher sheets. The company pro- duced only one of such journal vouch-
 CT shee,s, and there remained some
 $7,O0O. 900 contained in such ledger
 entries for which no supporting orig
 inal records were ever offered by the
 company or, made available to the 1 commissions engineer and accoun-