The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-01-09
CITY MULCTED
IN LIGHT DEAL,
SAY PROBERS
Contract With insult Firm
Branded 'Hiiack' by
Accountants.
MINToN STUDIES CASE
Deal Part of Merger Agree
ment, Is Charge of
Experts.
BY BASIL GALLAGHER
Times staff Writer

When the "Athenian," Samuel
insult, quit indianapolis more than
seven years ago, he left an alleged
financial burden for which electric
consumers have been paying ever
since, it was charged today.
From the investigation of the pub
lie service commission and The
Times, previous to the recent issu-
ance of an order to show cause why
electric rates here should not be re-
duced, it is alleged that the light
company pays twice as much as
necessary for current purchased
from an insult concern.
And by the same token, the COM
pany charges indianapolis electric
consumers an unreasonable rate, it
is charged.
This, according to Sherman Min
ton, public counselor before the pub
lie service commission, is only one
of the alleged peculiar business
transactions which have character
lied the operations of the light
company since the merger and led
him to petition the commission for
the hearing.
Delve Into Affairs
Utility experts, delving into the
affairs of the Indianapolis Power
and Light Company from It's re-
ports to the public service commits
sion, assert that Notwithstanding
the fact that the local utility can
generate its own current to more
than meet demands at half the
price paid for current purchased,
the company bought an enormous
and ever increasing quantity up to
December, 1881, and q somewhat
smaller quantity in 1892
Despite the fact that the Hard
ing street plant was in operation
in all of 1882 and was producing
current at low cost and while the
company had a capacity of almost
three times peak demand, these ex-
perts say, the company still pur-
chased 1914, 484 kilowatt hours at
more than two and half times the
price for which the utility gen.
Grated its own power.
According to data in the posses
sion of the public service commits
sion the cost per kiloWatt hour in
1927 was $00514, or slightly more
than half a cent a kilowatt hour.
Cost of current to the company
decreased slightly in 1928 to
$.00462 and then increased consist
emily in 1929, 1880 and 1881, the
figures show. In 1882, the cost de-
creased to $.00421, Notwithstanding
a decrease in production, the data
reveals.
Lowest in 1928
In regard to current purchased,
the records before the public serv-
ice commission show that the low
est amount bought was 26,055, 286
kilowatt hours in 1928.
In 1927 eleven months) 1922, 389
kilowatt hours we're bought, it is
reported. The quAntity, accord
ing to the reports of the light COM
pany to the public service commits
sion, increased each year up to and
including 1881, when 78,272,608 kilo-
watt hours were bought.
Utility experts point out that de-
spite the fact that the Harding
street plant was in operation in all
Of 1882 and was producing current
at low cost and while the company
had a capacity of almost three
times peak demand, still it pur-
chased 58,714,484 kilowatt hours at
more than two and half times the
price for which the utility generated
its own power.
Contract" Not Disclosed
The contract for the purchase of
this eXorbitantly expensive power,
according to Minton, was not dis
closed at the time of the merger.
The total excess amount paid to
the insults over the period from
Feb. l, 1927, to Dec. 81, 1882.
amounted to $1,688,170.47, according
to computations of utility experts,
now in the possession Of the public
service commission.
Utility experts assert that there
is no doubt that the contract for
current to be purchased was one
of the conditions Of sale of the
property of the Merchants Heat and
Light Company to the Chicago in
terestS.
Average Cost Set Out
The average cost Of current gen.
Grated and purchased by the Indi-
annapolis Power and Light Company
is set out in the following figures
along with the average cost per
XVIII:
In 1923 a total of 356.229,046 XVIII
were generated and purchased at an
average cost of S00509 per XVIII. In
1929, total Of 388,871 ,321 XVIII at
S.00538 per XVIII; in 1880. a total of
374, 997, $40 XVIII at s!00606 per XVIII;
in 1881. a total Of 4,762 sos XVIII
at S.00626, and in 1882, a total of
320,853, 1874 XVIII at an average cost
OF S.00544 per XVIII.
Utility experts point out, in re-
vealing the alleged worthlessness of
the insult contract that the Indi-
annapolis Power and Light Company
had the capacity to meet the de-
mand in 1880 when demand was
highest in indianapolis.