The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-09-10
UTILITY RATES
ARE ASSA|LED
AS EXCESSIVE
Power and Light Company
Preying on Public,
CIubmen Told.
HUGE PROFITS CITED
Consumer Bears Burden of
Holding Concern Grab,
Editor Charges.

EullOI OlldI yes
Power and light consumers of
Indianapolis are the prey of the
Indianapolis Power and Light
Company, which is collecting rates
on an artificial valuation resulting
from wartime labor and materials
costs.
Excessive charges are made
against the local company by its
parent, the holding company, and
local consumers must bear the
burden.
Taxation is being assessed Indi-
annapolis citizens by the utility COM
panies which is as real as that fixed
by the city and county councils, but
from which there is vastly less
chance of success on appeal"
These were the salient facts
brought forth and substantiated by
figures compiled from the Indian
apolis Power g. Light Company's
own reports, on file with the public
service commission, as presented by
Boyd Gurley, editor of The Indian
apolis Times, at the meeting
Wednesday night of the central
committee of the South Side Civic
Clubs.
Utilities Won Victory
Representatives from these clubs
were present to hear the explana-
ton of just why light and power
rates in Indianapolis are excessive;
and armed with figures and tabula-
tons, Gurley pointed out that:
1.-THE utility operators really won
the war when they had written
into the laws of the land that the
established basis for utility rates
be the actual investment plus re-
productions.
Their reproduction figures, how
ever, we're based on the high costs
of labors and material of the war
period.
To-day both of these factors
have suffered reduction with all
other commodities as a result of
the depression, yet the rates are
being collected on the wartime
figures"
Gurley pointed out that every
public utility really is a partner
ship with the people, because the
streets, public property, and tax
paid improvements are used by the
utilities.
Wants Fairness to Rule
1.-THE time has come for the peo-
pie to demand that they get the
advantage of the lower cost of Ia
Dor and materials.
Whether they get 1t depends
upon the people themselves. The
utility operators do not give up
their spoil without fight, and that
which the public obtains must be
wreSted from these operators"
I'm 1927, when the merger of the
Indianapolis Light and Heat Com
pany and the Merchants Heat and
Light Company was up before the
public service commission, COM
mittee from the Chamber of Com
merce was appointed to fix a fair
valuation. 1t was placed at
$40,000OO0.
when the time came to issue
stocks and bonds, the operators is
sued 100000 shares of no par value
common stock. which was estimated
to have a valuation of about $1.76
a share.
"They kept this stock for them
selves, for this SITS issue was to
provide the richest cream from the
indianapolis cow"
For the eleven months of 1927
this no par value common stock
with a valuation of $1.76 a share,
paid dividend of as cents a share.
In 1928 the fortunate owners
collected IS cents a share; in 1929
the dividend was IS cents; and in
1880, the great depression year, the
profit was 80 cents a share" he de-
clared.
Coal Cost Is Answer
TN other words" declared Cur
ley, this $170 share, over three
years and eleven months, paid the
owners $2.86 a share, or more than
$50 percent.
Where did the money come from
to pay the holding company so high
a dividend?" the editor uueried.
Gurley answered with the reading
of but the figures for a single item
coal.
"The Indianapolis Power and
Light Company must purchase its
equipment and every commodity it
uses from the holding company.
There is no way of checking on
the books of the holding company,
because no statute empowering the
public service commission to take
such steps ever has been passed, al
though up for passage in the gen.
eral assembly for two sessions.
1--WE must remember that the
power plants use coal screenings,
really the cheapest type fuel.
Price Stays Up
'Yet when these screenings were
selling at the mine for 90 cents, the
power and light company was pay
ing S1.76 at the mine to its parent
company. This was in 1927.
in 1923, 494,615 tons were pur-
chased at $130 a ton. In 1929 the
local company bought 505,l73 tons
at $13O. and in 1890. the depression
year, when coal miners were work.
ing for pittance and coal was the
cheaDeSt in a decade and SCREENINGS
almost Of no value, the local util-
ity. still buying from its holding
company. paid $1.S9 ton for 427, 22l
tons.
There is the reason for the high
rates." Gurley pointed out.
1T lies in the charges fixed by
the holding company. whose books
are "a secret to its mariners, the
public"