Opinion ID: 2086798
Heading Depth: 1
Heading Rank: 1

Heading: on the question of fair value

Text: The exhibits, testimony of the company's accountant, and the evidence of the accountant for the commission, who made an independent investigation and who testified in this cause, showed the original cost of the plant to be $2,135,136.37 and the net original cost after depreciation to be $2,027,331.67. This figure was not specified as a book value figure but as actual cost. Construction work in progress as of the date in question amounted to $16,056.31 and the fair value was determined, as of the date of the proceeding, (including $30,500 for working capital and materials and supplies) to be $2,073,887.98. While we do not approve so-called original cost rate base, the commission properly gave it consideration in connection with reproduction cost in determining fair value. There was evidence that the present cost would, for all practical purposes, be substantially the same as original cost because the plant was newly built at current prices and only a small per cent of the original plant, with perhaps a higher reproduction cost, was retained. There was testimony that in excess of 95% of the total amount in the plant account represented the cost of plant installations made within the past five years. The fair value as found by the commission is therefore supported by the evidence and the finding was not contrary to the interests of appellants.