Evening star., 1933-12-07
ROSTERS EXPLAINS
ESTIMATES ON GAS
Tells Utilities How He Arrived
at Costs on Old Company
Buildings.

Stuart F. Rosters, expert on original
costs for the Washington and George
town Gas Light Co.'S, explained to-
day how he estimated the costs Of COM
pany buildings put up long ago, where
it was impossible to get the costs from
the company books. He was testifying
in the valuation case now on hearing
before the Public Utilities Commission.
Mr.. Rosters started with the figures
in the reproduction cost study pre-
viously introduced. Then he developed
a "piecemeal factor" showing how
much more 1t would cost to put up
the buildings as the company went along
than If they were all put up at one
time by a general contractor.
His estimates showed 1t would cost
80 to "a per cent more. He therefore
stepped up the reproduction figures by
this amount, after making allowances
for changes in material and labor costs
by the use of component indices, v
which he had previously made up.
His complicated methods drew many
questions from Chairman Riley E. Elgen
as he went along, but Mr.. Rosters said
he had demonstrated its accuracy to his
own satisfaction.
Yesterdays proceedings moved
through dense mathematical forests IN
which the lay observers quickly lost the
way. Even the experts, Chairman Eigen
Peoples Counsel Richmond B. Keech
and Assistant Corporation Counsel VIII
liam A. Roberts, appeared bah1ed at the
testimony of Mr. Rosters, who spent the
day telling how he built up indices.
Session Ends in Confusion.
The morning session had ended ir
such confusion that during the luncheon
recess a blackboard was hauled into
the room and pictures were drawn on II
explaining the process. This seemed tc
, help but little. After Mr.. Rosters had
gone over it very carefully once more
Mr.. Roberts asked:
And If instead Of taking the price
Of the reproduction estimate Of 1882 you
! had taken any other selected price
you would have got exactly the same
curve?
Mr.. Kosters-Exactly.
Mr.. Roberts-Then so far as the curve
is concerned there Is no significance al
all in the selection Of the 1882 prices
except that 1t is some datum from which
to start?
Mr.. Kosters-It has no effect on the
curve; that is correct.
Mr.. Elgen-It has an effort on the
distance which the curve lies from 9
horizontal line, does it not?
Mr.. Rosters: Yes, it does, from q
horizontal line, but that horizontal line
must mean something. In my mind IL
means definite thing. r do not know
| what It is in your mind. would be
glad to know what you mean by this
horizontal line.
Uses Geometrical Terms.
Mr. Elgen-I am speaking now in
the terms Of analytical geometry, for
| instance, where you have graph In
one Of the quadrants and If you divide
of course, the series Of figures into one
| particular item or sum, you get curve
which may be in shape precisely as an
| other curve, but yet which would lie in
different part Of the graph or the
| sheet of paper.
Mr.. Roberts-Since the curve repre-
sents percentage.
Mr. Kosters-My analytical geometry
is not very well up to date, but do not
| follow that reasoning.
Mr.. Roberts-Since this curve merely
represents the percentage, is 1t not true
that the extent Of the gradient Is Of nc
significance until applied to some actual
price?
Mr.. Kosters-I think you are ex-
pressing 1t wrong. Mr.. Roberts. It does
not represent percentage. It repre-
sents q relationship.
Mr.. Elgin-That Is something that
can be demonstrated with very little
| trouble by anybody who knows arith-
metic, so we do not need to discuss II
| further.