The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-07-31
UTILITY, RATE
BASIS SCORED
BEFORE BOARD
Give the People a Break, Is
Plea of Mayor of
VinCenneS.
FLAYS PROFIT THEORY
Urges Commission to See
Depression Reason for
Lower Rate.

Utilities, with their present cry
of base rates on our investments"
were challenged today in a public
service commission hearing, and
were reminded of their fickleness to
an old love.
Give the people break" was
the substance OF a plea by Mayor
Joseph w. Kimmel and his COM
panions from VincenneS.
Kimmel wants the commission to
put the reproduction new" theory
Of rate making into effect on the
Vincennes water serVic
This theory, built up when the
utilities costs were rising, has not
been voiced much by them since the
decline in costs began. 1t is based
on the idea that rates should be
based on valuation of their prop
critics at what it would cost to re-
place them new, rather than at their
initial cost.
Owners Must Bear Loss
Mayor Kimmel reminded the
commission of the United States
supreme court decision in the In
dianapolis Water Company case
against Chairman John w. McCar-
die OF the Indiana public service
commission, which said:
1T is we'll established that values
Of utility properties fluctuate, and
owners must bear the decline and
are entitled to the increase"
Mayor Kimmel urged the COM
missioners TO consider this clause in
the inverse order, now that the
worldwide depression" has brought
great price decline. He said the
dollar valrG now is az least 40 per
cent more than in 1928 when the
United States court of appeals set
value of $1,O34,OOO on the Vim
cepnes Water Supply Company
properties.
The mayor also attacked the util-
ity theory of a 7 per cent return.
Hints Mismanagement
Seven per cent might have been
all right when capital was Of great
value" he pointed out. But surely
5 per cent on protected invest
ment like water monopoly is suf-
1lcient at the present time. The
government can borrow all the
money it wants as low as IL per
cent"
Service" he termed another fac
tor for consideration in rate MAX
ing, and cited testimony to show
that poor service and bad smelling
and tasting water had caused the
company to lose hundreds Of Gus
toners, many of them the large
business concerns of the city of Vim
cennes.
IF this company can not fur
niSh better and cheaper water, it
is a confession Of Encouragement
and we are ready to build a mu-
nicipal plant and do it ourselves"
the mayor declared.
Admits Water Bad
Present minimum is $1.46 for the
first 400 cubic feet.
Clyde Jones, attorney for the
company, admitted the water had
been bad and that the rates are
high. But he said the former had
been remedied, and the latter is due
in a measure to the luxury of liti-
cation" brought on by the city fight
ing the water company.
He cited Indianapolis and Green's
burg as examples of how the city
usually gets higher rates after a
fight has been taken through the
courts.
That the citizens are united in
their fight for lower rates and ben
ter service was shown by the ap-
pearance of John M Grayson, for
mer mayor, as co-counSeI with
Kimmell in the arguments today.
He is Republican and Kimrneu a
Democrat.
$40 Are Witnesses
They also cited the fact that, de-
spite great effort to procure them,
no VincenneS citizen appeared as
witness for the company, except two
bond men testifying on rate return,
during fourteen days of hearing of
the case at Vincennes. There were
$40 witnesses from all walks of
life" appeared against the company,
GraySon declared.
Hearing and argument are on two
petitions, first one filed by the city
for reduced rates and improved
service, and a second for rate in
crease filed by the company.
Commission engineers set a $775,-
600 valuation on the property and
city engineers 100000. VincenneS
attorneys praised the conduct of
this and the former case, lost by
the commission and city on appeal,
as conducted by Commissioner How
ell Ellis.
Owners of the company are:
George Alexander, Benjamin Perk
and Charles A. Edwards, all of In
dianapolis. Although they bought
it but a few years ago. they never
have introduced in evidence what
they paid for it as a valuation fac
tor.
a