The Birmingham age-herald., 1923-01-11

| Tn the Slales lHG hODlAC Ne1 company. has within the past few days. following the example set by the powerful power company, denied to the commissions authorized rep resentative access to its records. Such conduct can lead but to one conclusion, that the utility guilty of it has something to fear from full and complete examination and anaty- sis of it's records in so far as it's val uation is concerned. If the Utility Act of 1920 is not amply sufficient to enable the states commission to gain access, whenever tt deems proper in the public inter est. to all the records and plant of any public utility then I recom- mend that you make it so, beyond any doubt whatever. This Is abso- i lutely necessary in the public inter est.
 says Prepared In Star Chamber Tt further appears in the matter of the valuation of the property of the Alabama Power company by the associate commissioners that their IT page opinion issued by them as the basis on which they found their val i nation, was prepared by them not in conference with the president of the co mmission and that he was never 1 allowed to see the opinion until aft 1 CT they had adopted it: that such l opinion and order were not even 1 prepared in the offices of the com mission but jn room or hotel in I Montgomery: that although such | opinion and order involved matters of the most technical nature, they never submitted it before adoption l to the states expert engineer and accountant for their analysis or suggestion: that although such opin- i ion and order involve the most dlf- i fieult and complicated question of i law. they never submitted it before adoption to the attorney general of | tho state, or any of his staff, for l analysis or suggestion as to whether they had conformed to the law gov erning such difficult cases.
 "ThereJis, therefore, the strongest reason to believe that this valuation fixed by the associate commissioners 1 has not been made in accordance with the law and can not be accepted l without the very gravest suspicion i as to its correctness.
 I Engineers familiar with this prop erty and in a position to judge of it's
 fair value through their reports in- ! dcate that. in their judgment, the
 valuation fixed by the associate
 commissioners is approximately six
 million dollars in excess or It's far
 value. If their judgment is correct
 the public must pay to the stock
 holders of the power company
 tribute yearly and perpetually Of
 approximately a half million dol
 lars which would be nothing less
 than legalized robbery of the peo-
 pie.
 Propaganda to Deceive
 There is good reason to believe
 that since this order was issued, 1 propaganda has been broadcast over
 the state which is calculated to de-
 ceive the people in regard to thls
 matter. Among such propaganda is
 this:
 That it is to the interest of the
 people that the commission find a
 high valuation because the company l will thereby pay more taxes into the
 states treasury. This can only de eeive the minimizing and uninformed | man The law requires that rates | must be fixed for public utilities 1 high enough to cover all their costs ] of operation and also give them fair return on the fair value Of their l property Taxes must be allowed to the company as part of it's cost of operation and it is plain that such taxes will be paid by those who pay | the rates for lights, power, etc., ana not in fact by the company and its stockholders. So it makes but little difference to the company whether it's taxes are on a high or low basis | because it's customers must pay rates which include the taxes.
 What will be the effect of such I valuation? Based upon the operat- ing report of the company for the l first six months or 1922, which is I all that is available now, and dou- bling to represent the year, the new value found by the commission, with
 additions of property added, will ! make a total os approximately forty
 three millions of dollars, on which
 to figure the return. Using the rate
 of return of seven per cent only,
 there will be a deficit in the 1922
 operation of this utility of approNi-
 mately s1.250.00o. This deficit would
 have to be provided for by an in-
 crease in the gross revenue of at least 25 per cent which would mean increased rates on everything the
 power company sells, with higher | bills for the public to pay.
 "Iow long must this valuation control in the matter of the rates for light and power which the pub lie must pay? I will not undertake to say. The Utility Act of 1920, Section fe. contains in substance, the fol- lowing language: After the valuation is fixed by final orler of the com mission, it shall for all future rate making purposes be the permanent basic valuation of the property of such utility This part of the act has never been construed by the courts. rrza-- 1 e, . of opinion among both lawyers and engineers as to what this provision does mean. It certainly seems to be open to construction that when such a final order of valuation is made by the commission, such figure will continue thereafter to exert q greatly controlling influence in de- ternin!ng a valuation of the utility's property on any future date.
 What remedy or right of review |