The people's voice. [volume] (Helena, Mont.) 1939-1969, 1957-12-13
Utility Valuation Mudd|e'
Expensive For Consumers

poses.
The so-called perpetual inventory
method has made it possible in some
states for commissions to adjust rates
periodically to the ultimate advantage
of the consumer.
Contrary to the idea utility spokes-
men would have the public believe,
those who oppose rate increases, do
so, not because they want to run the
utility out of business, but because
years of experience have dimmed pub
lie confidence in the motives of the
utilities, and the methods they pro-
mote leave great voids-voids filled,
from lack of visible knowledge, with
suspicion.
The Federal Power Commission said
in 1910:
"The story of utility regulation
has been in the main a story of in
creasingly elaborate and protracted
procedures devised by representa-
tives of private companies to delay
or circumvent the efforts of regula-
tory bodies to achieve (the detectives
of regulation). The reason for this
appears obvious. Having obtained a
status substantially free from COM
petition, these companies now seek,
by the establishment of elaborate
techniques, to regain the arbitrary
control of costs and rates which
would be theirs under unregulated
monopoly"
There is the widespread tendency
of the utilities to identify them
selves with private business, how
ever, the advantages of monopoly
enjoyed by utilities sets them apart
from all other types of business,
and these advantages are enjoyed
in large measure as a result of
regulation.
This notion promoted by utility
management, that they are like any
other business and that investors in
utility securities have as much claim
to high returns as those investing in
private enterprise has led to their
being able to skillfully resist regula-
ton in the quest for maximum profits,
the use of legalistic and ac-
counting maneuvers.
1t would be impossible to state any
definite figures, but reliable esti-
mates range between 100000 and
100000 spent by the telephone COM
pany on its present rate application
which ultimately is included in
he rate base.
The engineering firm from Phila-
lelphia had bill of $4,000 against
he telephone company as of August,
1857. before the hearings ever began,
according to telephone company testi-
nony in Helena in November. There
vas fee of the expert, DR.. Langum,
rom Chicago; there were expenses
md services of Denver employees of
he company including an attorney;
here were the services of two top
Montana attorneys, and it would be
difficult to estimate the cost of pub
ic relations work carried on by local
personnel from the
ime the application for the increase
vas announced, as we'll as the in
reased advertising recently being
laced in all newspapers that bear
n company public relations work not
connected with the rate
Increase all ultimately included
1 the rate base.
Of even greater Importance, per-
APPS, is the fact the telephone COM
any included some of these costs in
ne rate base in such a manner they
-ould be paid for every year-rather
nan amortizing them out as is ac-
epted practice
Consumers will have spent some
10000 for attorneys and an expert
'ying to shed some light on the I'M
athomable and mysterious figures
/ the company accounting. Above
nd beyond these figures consumers
ave paid taxes to support the Public
ervice Commission.
If regulation has any purpose at
i this seems ludicrous.
The process that is supposed to
,ntrol monopoly and protect the con-
lmer, does neither.
Because of the Importance of the
rvice provided. the state would on