Southwest Washington labor press. [volume] (Hoquiam, Wash.) 19??-19??, 1924-08-29

ever extends its service outside its
city limits the need of regulation is
still more apparent. The customers
outside the city limits have no voice
in electing the city council of the
city furnishing them the service, and
have absolutely no appeal either as
to the service furnished them or the
rates charged. The cities can discrin-
mate unjustly between the rate to be
paid by the outside customer and by
the city resident who has vote in
the municipal elections. Power rates
can be fixed so high for the smaller
cities as to practically prohibit new
industries from locating there and
bringing them all into the city own
ing the light and power plant. With
out some disinterested body to whom
these outsiders can appeal for fair
treatment they will be absolutely at
the mercy Of the city furnishing the
service. The rates Of the Seattle
municipal plant are today as per cent
higher for residents just outside the
city limits than for those within the
city limits who have a voice in elect
ing the city officials. Water rates
are "a times higher outside the city
limits of the City Of Seattle than they
are within the city limits though both
services come from the municipality
owned water plant.
The public service commissions of
the various states, after many confer
ences, have promulgated a uniform
classification of accounts for light and
power companies. It is very complete
and requires that all such companies
keep their books in the same manner.
The purpose is obvious. In the first
place, it enables the commission lin
this state the department of public
works. to compare the various items
of construction, operating expenses
and revenue Of each company with ev-
cry other company. AS an example,
if the operating expense Of one COM
pany were Is per cent of its total
gross revenue while the other COM
panies engaged in a similar business
showed an operating ratio of only 40
per cent, it would lead the commission
to make an investigation to deter
mime the cause Of such discrepancy.
The system of classification is one so
complete that the commission can
even compare separate items of OPP
Grating expense, such rs generating
costs, transmission costs and distri-
button costs between all the compa-
MES In this manner the commission
is enabled to keep a constant check
to determine If q company is operat-
ing economically and efficiently and
whether all items are charged to the
proper account. It compels the COM
panies to make proper depreciation
and replacement reductions and pro-
hibits them from making an incorrect
showing as to earnings by including
items in plant account which are
properly chargeable to operating ex-
penses. If either a public utility or
municipality owned plant desires to
show fictitious earnings it could, ex-
cept for this system of classified
ton, charge to plant account many
items which could go to operating
Expenses. This is just what the mu-
nicipal plants are doing.
Financial Condition
The true financial condition of a
municipality operated plant will never
be known until Il is required to keep
its books just as the public utility il
compelled to keep its records. If a
comparison between a municipal plant
and a public utility furnishing the
same service is to be made, it is OBJ
vious that the true facts cannot be
ascertained unless each is required to
keep its books in an identical manner
The municipal plants are not required
by state law to maintain any uniform
classification Of accounts. Their &C
counts are merely investigated by the
State Board Of Accountancy, just az
are the accounts Of county and city
treasurers and all other public off.
,cials, to guard against defaleations
The people should be given an op.
portunity to know the truth regarding
the financial performance Of then