Montana labor news., 1944-03-09
MONTANA POWER
co. HEARING
is SCHEDULED

March 10, beginning at Gas a. m. in
the Federal building in Butte, is the
time and place fixed by the Federal
Power commission for a joint hearing
with the Montana Public Service COM
mission to determine adjustments to be
made by the Montana Power company
in its accounts, the Federal Power com
mission having charged the power COM
pany with write-ups and "other infla-
tionary items" amounting to s50,632.
841.26
The investigation Of the Federal
Power commissions staff has found that
S54,66O12794 is the original cost Of the
Montana Power company's electric plant
as OF Jan. 1, 1887, the effective date Of
the uniform system OF accounts Ac-
cording to the power commission about
4G% of the book cost is involved in its
order to the power company to show
cause why it should not be ordered to
dispose of $2,707690 now classified
in the account designated as Common
Utility Plant Acquisition adjustments in
accordance with am appropriate method
developed from evidence at the hearing,
(2l to dispose Of $50. .632 841 26, repre-
senting write-ups and other inflationary
items in its electric plant accounts, in
accordance with such plan as the com
mission shall approve or prescribe and
80 to prepare additional studies with
respect to $4.03l,25269 in its electric
plant account for the purpose Of deter
mining the appropriate classification and
disposition Of this amount in accordance
with the requirements of the commits
sions uniform system of accounts
The company's annual report for 1912
to the state, shows that its accounts
value the entire plant Of the company
at s131,315, ,533.88 This includes other
properties such as water plants and the
gas plant and deducting the value Of
those as carried leaves the electric plant
with a book value of something over
sll9,OOO,OOO.
No rate base for the Montana Power
company has ever been prescribed by
the Montana Public Service commission
according to statements made by the
state body 1t mas been generally as
sumed by the public that the book valu-
at on Of the electric light plant as re-
ported has been used by the company
as basis on which to fix its rates
Since the company has always shown a
substantial profit on the basis of the
book valuation, which according to the
Federal Power commission is nearly
twice what it should be, it seems evident
that if such is the case, the people Of
the state have been contributing tre-
mendous profits to the company on the
basis Of its actual investment in plant.
The public service commission cannot
be too severely criticized for its failure
to fix a basis for rates charged by the
company as the cost Of an investigation
to determine the actual valuation Of its
plant would have entailed the expendi-
ture Of a considerable sum by the state.
In several of the legislative sessions Of
the past decade, bills have been intro
duced providing for the taxation of the
company on the same basis as the valu-
alton used for the fixing of its service |
charges. These bills have always been
easily defeated by the influence Of the
ACM company and the Montana Power
company o nthe assemblies. Now, it ap-
pears, that with the Federal Power COM
mission in action against the power
company on the assemblies. Now, it ap-
Continued on Page Three