The people's voice. [volume] (Helena, Mont.) 1939-1969, 1958-03-07
Commission Should Order
Continued From Page One)

ProteStantS brief said, I'm TINS cas-
the Montana Power Company is ask
ing to raise its rates to seek a faI
return on it's fair value but to sub
stantiate it's claim the company
must rely on two basically inconsist
ent positions. 1t must point to pre-
carious present, where it claims ex
penses encroach upon income, ant
yet argue that tremendous future
requires immediate expansion. These
positions are difficult, if not impos
sible to reconcile. If business is really
slow there should be little talk Of
expansion, but if the steady growth
which the company has experienced
in the past is to continue then income
will also rise and rate increase will
be hard to justify"
The following paragraphs are ex-
cerpts from protestants' brief:
Rate payer should not be re-
quired to supply capital:
1t is a basic tenet of rate-making
that reasonable rates should be great
enough to cover the costs and eX-
penses of the company, pay reason
able rate of return to the stockholders
and service the debt of the company.
1t has thus been recognized that the
rate payer is not to be burdened with
furnishing the capital for the utility
and then pay return on the fair
value including the capital which the
rate payer has furnished.
The heart of the matter is whether
retained earnings are contributions
by the stockholders or contributions
by the rate payer. Mr.. Corette thinks
they are contributions by the stock
holders because the money "is not
the consumers money once he pays
his bill". This may be true in practi-
cal sense for it certainly is no longer
the rate payers money, but this is
not correct analysis of the situation
for rate making purposes.
IF there is money left over after
the expenses have been paid and a
reasonable dividend has been paid
to the stakeholder it is an indica-
ton that the rates are so high that
the company is able to capitalize
part of the rates.
Although it may not be the rate
payers money, it is money supplied
by the rate payers and not the stock
holders and there is no limit to
the rates that can be required
Protestants said the following items
nearly 16 million dollars, in
GUIDED by the Company in their rate
base figures, should be taken out.
The following quotes are from their
)rief.
1. $685. for materials and sup
'lies. The part of these supplies used
or new construction should be prop
,rly left out of the rate base, and the
company presented three different
as to what portion of
his amount went for new and what
)art went for replacement.
2. $823,829 for working capital.
IN December 1856 the Company had
redit of $7,432,008 for income taxes
md $1,738,777 for other taxes repre-
enting taxes owed but not yet paid
~ the Company. They had the use
# this money until they paid the
axes. The Company said they had to
'orrow money to pay taxes but this
means nothing-if they care to spend
he tax money for other things and :
hen borrow to pay them when the
ime comes, this does not change the $
act that they had the uss of the {
honey, interest free, between the
me they earned the income and the i
me they paid the taxes on it. In {
edition the 1856 report to the Public a
ervice Commission shows a customer '
eposit for $250,890.
3. $2,954,38O for street lighting
These systems are a separate
art of the company's business. They
i'll the system for cities and the city
tizens are taxed for the installation
nd upkeep. This is not charge for
IN Nooe WsHE Dua e. Um y