The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-12-17
BIG INCREASE
IN VALUATION
IS PROPOSED
Hughes Electric Company Re.
production Cost New, With
Other Factors, $689,00O
RATE HEARING OPENS
Agreed Valuation of 1921 Is
Subject of First Clash at
Utility Hearing
RATE HEARING OPENS

mission in the Hughes Electric COM
pany rates and practices case opened
before the railroad commission this
morning with a battery Of experts
present to testify.
Dispute arose at the very outset
between contending parties. E. B.
Cox, chef counsel for the utility, pre-
sented q petition asking that the Pc
titIon of j. l. Roop and Others, con-
stituting case No. 1890, praying for
rebates and fcparations, be dismissed,
This was opposed by F. o. Hellstrom
who filed motion to effect that since
+. A. Hughes, president Of the COM
pany, and attorneys had stipulated a
value of the utility property for fix
ing rates as Of May l, 1921, that the
inquiry be limited to additions, bet
terment and depreciation since that
time.
The crux of this proceeding lay
in the stipulated value. The utility
company had agreed to value Of
$355,484 for the physical property of
the plant. to which was added $4,000
for working capital and $4,000 for
going value, making a total value
recommended of s410.OOG, it was con-
tended by the petitioners.
In the present case the utility
claims the reproduction cost of the
property, with working capital and
going value, is over $6S9.OOO, or al
most 100000 more than the figure
agreed on in 1921.
The railroad commission retired
from the tearing, and announced its
decision on the motions after de-
liberation. stating that both would
be denied, but could be renewed at
the end of the hearing and parties
could file briefs if desired.
Reviews Steps.
The utility company ives represent
ed by Mr.. Cox, Aubrey Lawrence,
Fargo attorney; VIM. J. Haganah
and S. II. Wcinbcrger, Chicago util-
ityexperts and w. L. Kraft. +. o.
Heilstrom appeared representing
petitioners; and c. l.. Young the
city of Bismarck. Mayor Lenhart
was present at the opening of the
hearing and County Attorney E. S.
Allen also was present, but did not
participate. E. H. Morris and Chas.
Martin represented the railroad COM
missions expert staff and First AS
sistant Attorney General John
Thorpe was present as legal adviser
Of the commission.
Chairman Milhollan, at the outset,
reviewed the steps leading up to the
hearing. On May 20, 1922 the utility
had asked permission to continue in
effect rates existing. On Oct. %,
{ 1922, petition was filed by con-
sumers for reduction. Case 1883,
decided in 1921, was reopened and
assigned for hearing Dec. 20, 1922.
On Dec. 2s, 1922. the Hughes COM
pany got an injunction prohibiting
the commission from inquiring into
rates, which since has been dissolved
after decision Of the supreme court.
Mr.. Milhollan amounted that the
hearing was on the application of
the Hughes Electric company to pres
cnt additional testimony on the sub
ject Of going value. the petition of
consumerT for a reduction in rates
and on the commissions own mo-
tion.
S. H. Weinbefger was the first
witness. He supervised the maxi
ing Of an inventory and appraise-
ment Of the utility property here
this fall for the firm Of Haganagh
and Erickson, Chicago utility firm.
He testified as to the quantity of
materials reported in his inventory.
Gives Figures.
VIM. ]. Haganagh was the util-
ity's chief witness. He said the
reproduction cost new of the electric
utility was figured at $457,918, and
less depreciation, 1891 ,575; the steam
'heating plant, $146,214, less ,depreci-
alton. $1l5,616. The present value
of the physical property as Of Octo-
Der l, 1923. was placed at 1904, 1929
and deprecated value, $507,191.
He said he would add working cap
ital Of $4,000, stating this was the
average amount necessary in con-
Quoting the business.
He placed going concern value at
$4,000. He said going concern val
ue had been held to be q property
right by the United States supreme
court, and that it represented value
from the fact that company was
being operated with financial sue
cess. The amount which should be
allowed, he said, was q. matter of
judgment. He explained his method
of arriving at computation Of $685.
OO0 NC Tho ron 9 IN h1n <pni,.w ~,o l., - -
the property, from q comparison of
numerous electric utility plants in
the countryin building up their bus
mess.
His total figures on valuation, with
these last two 1t5l6s added, he gave
10 reproduction cost new $685., 9,129
and present value $592,l91.
PARDON BOARD TO MEET
The state m pdnn hnavd ,,a11 hn1l