The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-12-22
UTILITY FIRM
COAL BUYING
GOUGE Barred
Light Company Sells to
Itself at Higher Than
Market Price.
OPERATING COSTS liked
But City Officials Fail to
Offer Figures Showing
UnreaS0nbIeneSS.'

indianapolis Power & Light Com
pany is selling coal to itself, through
a subsidiary company, above the
present market price under a To-
year contract signed in 1929.
Although company officials hao
said at the first compromise session
that the contract would be brought
TO the next hearing, they fought
off making it public today ano
agreed only to let compromise COM
mitteemen see it at the company
Office.
Should the contract be shown to
be unreasonable" to the extent of
$4,000 year in excess payments,
as claimed by rate reduction petit
TONERS, this amount could be de-
Quoted from the operating expense
in rate case.
The city and citizens committee
meeting at the second compromise
conference with company officials
today attacked the coal contract and
prices paid, but produced no figures
to show it's ''unreaSonableness."
Claim Price Too High
They claim that instead of the
average price per ton of $1.498 net
paid by the company during 1890
on $4,000 tons, a similar amount
could be bought for from 10 to 80
cents a ton.
Another conference will be held
to offer proof of these contentious,
This morning, the facts in the
case all were confined to the COM
pany's side.
Clifford Harrod, president and
general manager of the company
presented figures to show that from
1920 to 1928, when coal was pur-
chased on the open market. the
average cost per ton delivered for
the entire period was $3.O1. Lowest
price was given as $2.56 in 1923.
$4,000 Tons Bought
Under the contract with tn,
United Golfers, company subsidiary
oO4,OOO tons had been purchased il
1929 at $2.49 per ton delivered anc
433 900 in 1880 at $2598, he said
Harrod pointed out that. accord.
ing to the charge made from Mayol
Reginald H. Sullivan, in a series Of
questions to the company, a $500 OO(
excess was paid in 1890. This wouIc
neceSsitate the purchase of the Goa
at 69.8 cents per ton at the mine
and this could not be done, he de.
clared.
1t developed that the mayor hac
used the wrong figure, obtained from
Il. F. Haddath, an accountant, anc
that it should have been $213 OO(
instead of 100000.
Contract Defended
Continuing his defense of the
contract, Harrod asserted it was
necessary to protect the company
over a ten-year period against fail
ure Of delivery and that the maxi
mum charge under it was $2.85
ton.
Nearly an hour of questioning bv
BrodthurSt Elsey, Indianapolis
glove manufacturer, was required
to obtain from Harrod the adnIs-
sion that his hands are tied, so lar
as coal purchasing by his concern
is concerned.
Edward H. Knight, city corpora
ton counsel, pointed out that the
public is SO concerned in utilities
that like corporations they should
make all purchases on the lowest
and best bid.
1T never pays to sell to your
self" El5ey suggested. Sooner OF
later you will be caught cheating
yourself"
Offers Suggestion
Commissioner Harry K. Cuthbert-
son of the public service commission
who suggested the compromise plan
for possible rate reductions, listened
for two hours and finally offered the
suggestion that facts be produced to
prove The contract unreasonable.
Excess payments always can be
deducted from operating costs in
rate making" he pointed out.
Written below the line and de-
Quoted from dividend payments,
they only will be carried at the
company's loss and not at the cost
to the consumer"
James Deery, city attorney, as
simulated this and suggested the rate
cut petitioners will meet again with
some facts and figures.
The meetings grew out of cleo
trio and water rates reduction petit
tons filed by the city and the South
Side civic clubs under direction of
Walter G. Rothermel.