The Daily Alaska empire., 1946-03-13
STUART PUT
 UNDER FIRE
 AT HEARING
City Witness Finds Stand Shaky Under Faulk-
 ner Questioning

H. L. Faulkner. Alaska Electric Light and Power Company attorney, having his inning in the pitcher box last night at the hearing being held before the City Council on AEL&P rates, had City Utilities Engineer Walter T. Stuart swinging wildly at some of his swifter shots
 Faulkner opened cross examine tion of the chief witness for the City by probing the Utilities En- gineer's qualifications to testify as rate expert. The attorney also pinned down Stuart as to the eX- act extent of his knowledge of the Federal Power Commission law and procedures which the Engineer had cited freely during his direct testi- mony.
 ! Admissions developed from Stuart by Faulkner's questions were; 1. Stuart is not registered as an engineer under the Territorial act of 1889; though he stated he IS eli- gible.
 2. Denied any attempt to give impression that Seward rate case had been decided upon his testl- mony. In the proceedings of that case, Faulkner cited that the Court had stated it would be very little interested in what Stuart had to say. Stuart replied that was only half of what the Court had said, that reference wss made to bringing Valdez circumstances into the pro- ceeding.
 3. That, while devoutly probing AEL&P expenditures and capital outlays during the years from 1896 to 1914, Stuart had paid consider ably less attention to company earnings and is not in position to say whether the company made a profit or loss during that Is year period except that 25 dividends were paid.
 4. That Stuart had seen evi- dence indicating that it is general rule that utility companies in small cities have lost money during the first few years of operation. | Water Rtq;lt valuation
 Pitching directly at the Sl00 val uation Stuart had placed, for rate purposes, upon the AEL&P's Gold Creek water right, Faulkner asked for exact explanation as to how that figure had been reached. Stuart's reply was that the amount was arbitrary, since the right had been mainly located, not purchas- ed. and the Sl00 includes survey costs as well as expenditure for posting location notice. The basis, he again contended, is what was actually paid, not present market value.
 i That contention brought Federal Power Commission accounting rules into the picture. On that point' Faulkner said he believed the Coun- icil might have become confused by Stuarts frequent FPC references Stuart had replied that he had not I allowed costs of subsequent law suit in the water right valuation because it was not original cost as provided for by FPC accounting practices and he assumed the law suit expenditures had been repaid the company out of operating ex- 7 penses.
 ;i Those FPC Rules !! What bearing do FPC rules have ! here? Faulkner asked.
 ! From a series of questions and answers was derived Stuart's con tention-which he called upon City Attorney Howard D. Stabler to support-that Alaska cities are au- thorized by statute to set utility rates and that they may adopt any rules they wish to arrive at rate base.
 To Faulkner's question as tc whether the City of Juneau has adopted any such set of rules Stuart replied that he could not say so, but that he had worked up his data under instructions of the City Council to proceed along lines of original cost less depreciation Stuart stated that the right of the council to fix rates has been up ..ld by Circuit Court of Appeal decision-which contention Lawyer Faulkner denied
 City Attorney Stabler iriterpolatee , tis assurance that statutory au-
 thorization is provided for Alaska , cities to fix upon a fair rate base
 High Court Decision l After bringing out that FPC } license to an electric utility car.