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the Governor and the Chairmen of the Senate Finance Committee and the Assembly Ways and Means Committee.
There has been appropriated for the Commission, regular, for the year ending June 30, 1924, $718,661, divided into $568,661 for payment of salaries-personal services and $150,000 for maintenance and operation. There has been paid out for salaries to and including December 31, 1923, $260,585.12, while the disbursements and amounts held by requisitions outstanding for the same period total $60,230.32, making a total cost of operation of the Commission for the half of the year, July 1 to December 31, 1923, inclusive, of $320,815.44. The amount available for the operation of the Commission for the balance of the present year, to July 1, 1924, is $397,845.56.
There has been requested of the Legislature for the year commencing July 1, 1924, the sum of $770,818.00.
Recommendation has also been made by the Commission that for the coming year $500,000 be appropriated for the elimination of grade crossings. This Commission, however, has nothing to do with the disbursing of this money except to segregate amounts, approve or disapprove bids and accountings as submitted to it.
The available balance in the appropriation for investigation of rates and standard of service of gas companies in Greater New York on July 1, 1923, was $39,424.76. The expenditures to December 31, 1923, inclusive, total $12,915.80, leaving a balance as of January 1, 1924, of $26,508.96.
SUMMARY OF WORK OF THE YEAR
The Commission has expeditiously handled the various formal applications, petitions and complaints which have been filed with it during the year, and there has been no undue delay in progressing to final order except in matters where extended examinations and investigation have been required before the Commission could act. The Commission has wherever possible taken up complaints between the public and utilities under its jurisdiction and brought about a satisfactory solution. This course brings about quicker action and a saving of time, labor and money, both to the State and the parties at interest.
There has been a slight increase in the number of formal cases over the preceding year, principally for State approval of construction of extensions into new territory by electric lighting corporations and exercise of franchises granted by local authorities, principally in rural territory, and in applications for the necessary certificate for the operation of a bus line. The falling off in informal complaints follows gradual return to normal conditions after the war. There has been a marked reduction in complaints over rates of public utilities.
There were 954 public hearings by the Commission in 1923, as against 1,156 in 1922.
This summary shows the number of applications, petitions and complaints, formal cases, and informal complaints received by the
Commission and disposed of during the year ended December 31, 1923, together with a like summary for the two preceding years:
There were pending before the Commission on July 1, 1922, 441 formal applications and petitions. One year later, July 1, 1923, this balance of cases not acted upon had been reduced to 307, making a net gain in undisposed of matters of 134. The July 1, 1923, balance of 307 was further reduced to 299 at the close of business December 31, 1923.
SUMMARY OF ORDERS ISSUED
Orders adopted by the Commission in 1923 in formal applications, petitions, and proceedings instituted by it, totaled 1,257, as against 1,225 in 1922 and 1,466 in 1921. There were also issued, under special permission, 288 orders permitting the establishment of rates and charges and making changes in rules and regulations in tariff schedules. These special permission orders permitted tariff changes only where rates were reduced, principally commodity rates on steam railroad lines, and where errors were corrected in filed tariffs.
There were filed during the year 10,901 tariff schedules, covering the utilities under the jurisdiction of the Commission, under statutory authorization or by special permission order. There were also filed 378 concurrences, power of attorney, and contracts in connection with the filing of tariffs, schedules, and under requirements of the Commission.
There was a decrease of 3,645 in the number of tariff schedules filed in 1923 as compared with 1922, due to the amendment of existing freight tariffs of steam railroads on July 1, 1922, when the 10 per cent reduction in freight rates by the Interstate Commerce Commission was made effective. This reduction required an amendment of every steam railroad freight tariff on file.
This summary shows that in the year 1923, orders adopted by the Commission related to applications and petitions for: Authority to purchase or acquire stocks or bonds; to issue stocks, bonds, notes, etc.; to increase or reduce capital stock; reorganizations; approval of transfer or lease of franchises, works and systems.
Construction and exercise of franchise by gas, electrical, steam, telegraph and telephone
Failure to file reports .
Filing schedules, reports, information required by the Commission.
Summarized, Special Permission Orders issued relate to the
following classes of public utilities:
Under section 29, Public Service Commission Law:
Under subdivision 12. section 66, Public Service Commission Law
Electrical corporations .
Under subdivision 2, section 92, Public Service Commission Law:
CORPORATIONS UNDER JURISDICTION
December 31, 1923, the Commission had upon its record the names of 1,123 corporations1, municipalities, and unincorporated persons engaged in serving the public in some capacity, or incorporated or organized for the purpose of rendering such service. This number is an increase of 28 as compared with 1922, accounted for principally by an increase of 52 bus lines over the previous year and a decrease of 8 baggage and transfer companies and 8 electrical corporations. There has been a decided tendency on the part of smaller electrical companies to consolidate with or sell their properties to larger corporations. The total number of companies under the jurisdiction of this Commission in 1921 was 1,038 and in 1922, 1,095.
The corporations and persons under the jurisdiction of the Commission are classified as follows:
Less duplication on account of corporations which make separate reports in two or more classes of operations or for distinct properties..
2 Includes only commercial concerns (i. e., those operated for profit) which use in the public service property of a value of at least $10,000.
On January 25, 1923, an opinion and orders were issued covering the State-wide telephone case instituted by the present Commission on its own motion and the New York City case brought by the New York Telephone Company on a petition to increase exchange rates. This was the first time that any commission in this State had ever made conclusive findings in the matter of the property values and rates to be used by the New York Telephone Company. Every fact which had any bearing on the issues, including the relationships of the New York Telephone Company with other corporations, was thoroughly investigated. The outstanding features of the orders made by the Commission were the following:
(1.) For many years the New York Telephone Company has been paying 412 per cent of its gross revenues to the American Telephone and Telegraph Company. This payment in 1921 amounted to $3,641,000, of which $2,506,720 was paid from revenues in the city of New York. By the Commission's order this 412 per cent payment has been changed to $2 per station. For the year 1923 the New York Telephone Company's payment to the American Telephone and Telegraph Company is thus reduced $1,216,000.
(2.) It was contended by the New York Telephone Company that the structural value of its plant was $330,000,000, and, including going value, that the property on which it was entitled to a return was worth $409,700,000. Further, the United States Court, sitting in the city of New York, in an opinion rendered in May, 1922, stated, in reference to the value of the New York Telephone Company's propetry in this State, "No computation can reduce the basis for return much below $300,000,000." The valuation fixed by this Commission was $235,680,000, and, with working capital added, $246,000,000; $162,000,000 less than the company claimed, and $54,000,000 less than the United States Court had indicated. Nothing was allowed by this Commission for going value.
(3.) The New York Telephone Company had been including as expense items very large sums annually for depreciation. The Commission directed that the existing depreciation reserves. should not continue to be accumulated at so high a rate and that annual expenses of depreciation be reduced. The results for the year indicate that this has effected a saving of over $1,000,000.
(4.) Under the rates in effect at the time the orders were made, the New York Telephone Company was receiving a net return of 5.76 per cent, in the city of New York, while in the balance of the State of New York it was receiving a net return of 7.98 per cent. Although 8 per cent has been generally allowed by Courts and Commissions, this Commission directed rates to pay a net return of only 7 per cent throughout the State of New York, both in the city of New York and in the balance of the State. The attention of Your Honorable Body is particularly called