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10 F.(2d) 167 50. The reasonable and necessary average to 11 per cent. of the gas oil used. During cost of oil used by the plaintiff during the the year 1922 there was realized 201,078 galyear 1922 was 7.19 cents per gallon, during lons of water gas tar for which production the year 1923 was 5.31 cents per gallon, and expense was credited at the rate of 3.62 cents during the year ended November 30, 1924, per gallon. During the year 1923 there was was 4.18 cents per gallon.

realized 227,808 gallons of water gas tar for 51. The plaintiff necessarily and reason- which production expense was credited at ably used in its generators, in the manufac- the rate of 3.81 cents per gallon, and during ture of gas during the year 1922, 36.239 the year ended November 30, 1924, there was pounds of anthracite broken coal and coke realized 255,866 gallons of water gas tar for per 1,000 cubic feet of gas made. During which production expense was credited at the the year 1923 the plaintiff reasonably used rate of 5.07 cents per gallon. 36.541 pounds of anthracite broken coal and 56. There is also realized from the manucoke per 1,000 cubic feet of gas made. The facture and distribution of gas, in the plainnecessary amount of such generator fuel used tiff's works and system, a residual credit for during the year ended November 30, 1924, drip oil reasonably amounting to approxiwas 35.98 pounds per 1,000 cubic feet of gas mately 1.3 per cent. of the gas oil used. made.

Such drip oil, during the years 1922, 1923, 52. The average cost to the plaintiff of and 1924, as sold by the plaintiff, was credanthracite generator coal used by it during ited to the cost of produotion. the year 1922 was $11.3122 per gross ton 57. In the manufacture of water gas of delivered at the plaintiff's plant. Such cost the calorific content of not less than 650 Britduring the year 1923 was $11.6724 per gross ish thermal units per cubic foot, as prescribton, and during the year ended November 30, ed by chapter 899 of the Laws of 1923, un1924, was $11.515 per gross ton. The aver- der the conditions obtaining in a plant such age cost to the plaintiff of coke used by it as that of the plaintiff, there would be reduring the year 1922 was $16.0995 per gross quired for generator fuel, per 1,000 cubic ton delivered at the plaintiff's plant and such feet of gas made, approximately 35.5 pounds cost during the year 1923 was $10.5402 per of the grade being supplied in recent years, gross ton, and during the year ended Novem- or its fuel equivalent, and for boiler fuel per ber 30, 1924, was $9.4703 per gross ton. 1,000 cubic feet of gas made, approximately

53. The plaintiff also necessarily and rea- 17.6 pounds of solid fuel, or its fuel equivasonably used under the boilers, in the manu- lent in water gas tar, and there would be facture of gas during the year 1922, 18.115 realized, as residual credit under average oppounds of fuel consisting of bituminous and erations, water gas tar amounting to .752 anthracite steam coal, screenings from the gallons per 1,000 cubic feet of gas made. anthracite generator coal, and coke breeze. 58. There is also necessary in the manuDuring the year 1923 such boiler fuel neces- facture of water gas, in a plant such as that sarily and reasonably used by the plaintiff of the plaintiff, the employment of gas-makamounted to 18.144 pounds per 1,000 cubic ing labor and repair labor, the use of repair feet of gas made, and during the year ended material, and the incurring of miscellaneous November 30, 1924, to 13.49 pounds per 1,000 works expense and gas storage. During the cubic feet of gas made together with the elec- year 1922, under the prices and rates of pay tric energy purchased to run the blowing then in force the cost of gas-making labor equipment.

in the plaintiff's plant was 8.149 cents, of re54. In the manufacture of water gas pair labor and material 4.804 cents, and of there is also required the use of iron mass, miscellaneous works expense and gas storage city water, and incidental minor materials 1.333 cents, per 1,000 cubic feet of gas made. and supplies. The cost of these items in the During the year 1923, under the prices and plaintiff's plant amounted in 1922 to 1.527 rates of pay then in force, the cost of gascents per 1,000 cubic feet of gas made, in the making labor was 8.548 cents, of repair labor year 1923 to 1.85 cents per 1,000 cubic feet and material 4.256 cents, and of miscellaneof gas made, and in the year ended November ous works expense and gas storage 1.275 30, 1924, to 1.349 cents per 1,000 cubic feet cents, per 1,000 cubic feet of gas made. of gas made.

During the year ended November 30, 1924, 55. In the manufacture of water gas un- the cost of such items was, for gas-making der the conditions obtaining in a plant such labor 7.5812 cents, for repair labor and maas that of the plaintiff, there is realized as a terial 4.98S6 cents, and for miscellaneous residual credit under average operations, wa- works expense and gas storage 1.3617 cents, ter gas tar equal in amount to from about 10 per 1,000 cubic feet of gas made.

gas made.

59. During the year 1922 under 'the out of use, and the plant must therefore have prices of material and labor at that time in sufficient capacity to meet a possibly increasforce, the reasonable and actual cost of the ed maximum day's demand, if it occurred at water gas manufactured in the plaintiff's a time when this largest generating unit was plant for the use of its consumers was 61.- not being operated. 257 cents per 1,000 cubic feet of gas made. 62. The actual and reasonable cost of During the year 1923 such cost was 54.261 manufacture of gas supplied by the plaintiff cents per 1,000 cubic feet of gas made, and to its consumers during the year 1923 was during the year ended November 30, 1924, 68.212 cents per 1,000 cubic feet of gas sold. was 46.7438 cents per 1,000 cubic feet of Such cost during the year 1923 was 60.8

cents per 1,000 cubic feet of gas sold, and 60. In the manufacture and sale of gas, during the year ended November 30, 1924, a percentage of the gas made is necessarily was 52.8307 cents per 1,000 cubic feet of gas and unavoidably lost, due to condensation, sold. difference in temperature at the consumers' 63. I find that the reasonable and necesmeters, slow meters, stolen gas, leakage, and sary amount of taxes actually paid or acthe like. The relative amount of gas lost crued by the plaintiff on the property owned varies according to the sales of gas in rela- and used by it for the production and distion to the mileage and size of mains, the tribution of gas and upon its gas operations character of the soil in which the mains are

was, during the year 1922, 7.882 cents per laid, and various other factors. I find that 1,000 cubic feet of gas sold; during the year the unaccounted-for gas, as to the plaintiff, 1923, 8.994 cents per 1,000 cubic feet of gas represented in 1922 approximately 9.91 per sold, and during the year ended November cent., in 1923 approximately 10.42 per cènt., 30, 1924, 10.4014 cents per 1,000 cubic feet and in the year ended November 30, 1924, of gas sold. The foregoing figures of taxes approximately 11.09 per cent., and that in actually and reasonably paid by the plaintiff calculating the plaintiff's present require- include the amount actually paid or accrued ments and costs these approximate figures by the plaintiff for federal income taxes upshould be used as a basis of computation. on its gas operations, under the rates actual

61. During the year 1922 the plaintiff ly charged by it, of 1.323 cents per 1,000 sold to its consumers 632,599,200 cubic feet cubic feet of gas sold during 1922, of 2.741 -of gas, and during the year 1923, 694,527,200 cents per 1,000 cubic feet of gas sold during cubic feet of gas. During the year ended 1923, and of 4.199 cents per 1,000 cubic feet November 30, 1924, such gas sales amounted of gas sold during the year ended November to 712,671,000 cubic feet. The consumption 30, 1924. of gas and its sale varies from time to time, If, however, the $1 rate prescribed by depending, in large part, upon the weather chapter 899 of the Laws of 1923 had been and consequent factors. The "peak” or max- in force during the full period of the proofs imum demand in the territory served by the herein, the plaintiff would have paid no fedplaintiff is found in the winter months. The eral income tax upon 1922 operations, and plaintiff company must therefore be prepar- would not pay any federal income tax upon ed not alone to make sufficient gas to meet a 1923 or 1924.operations, for the reason that, total annual demand, but must be prepared as hereinafter found, no net income would to meet such maximum day's demand as may have been earned under such $1 rate during develop, and the maximum day in any year 1922 and 1923, and the deductions from the may exceed the maximum day of any previ- income during 1924 would have left no inous year. The increased use of gas as a sub- come subject to that tax. With the amount stitute for coal for heating and other domes- of federal income tax eliminated from the tic uses has a tendency to accentuate the max- plaintiff's operations, the amount of other imum day's demand in relation to the an- taxes actually paid by the plaintiff would be nual output, and thus requires a relatively reduced to 6.559 cents per 1,000 cubic feet large plant capacity in relation to the aver- sold in 1922, to 6.253 cents per 1,000 cubic age daily requirements. I find that the feet sold in 1923, and to 6.2024 cents per 1,000 plaintiff's plant ought reasonably to have, in cubic feet sold in the nominal year ending addition to a reasonable reserve manufactur- November 30, 1924. ing capacity of the plant as a whole, a re- 64. There should be included in the total serve generating capacity equal to the capac- cost of making and distributing gas the cost ity of its largest generating unit (3,500,000 of renewals and replacements of property cubic feet per day) as accidents or the need owned by the plaintiff, and from the evifor repairs may at any time take this unit dence before me in this case I find the sum 10 F.(20) 167 of 31/2 cents per 1,000 cubic feet of gas sold the benefit by crediting the sum against the charged by the plaintiff for such retirement cost of manufacturing and distributing gas. expense, based upon its experience over & During the year 1922 such miscellaneous opperiod of years, to be reasonable and neces- erating revenue reaso

asonably amounted to 2.sary for such purpose.

434 cents per 1,000 cubic feet of gas sold, 65. In addition to the items herein before during the year 1923, to 2.819 cents per 1,000 referred to, there must be included, in deter- cubic feet of gas sold, and during the year mining the cost of gas delivered to the con- ended November 30, 1924, to 2.0997 cents sumer, various items entering into the cost of per 1,000 cubic feet of gas sold. distribution, including transmission and dis- 68. I find that the net actual necessary tribution expense, commercial expense, gen- and reasonable cost to the plaintiff of the gas eral and miscellaneous expense, and uncol- supplied by it, after deducting miscellaneous lectible gas bills, and I further find that the operating revenue, during the year 1922 was actual and reasonable cost to the plaintiff of $1.11532, during the year 1923 was $1.04305, these several items, in cents per 1,000 cubic and during the year ended November 30, feet of gas sold, during the year 1922 was 34. 1924, was $.980493, exclusive of any return 372 cents, during the year 1923, 33.830 cents, whatever upon the property or investment and during the year ended November 30, of the plaintiff nece

cessarily devoted to the 1924, 33.4169 cents.

service of its consumers. The evidence ad66. On the evidence before me I find that duced in this record affords no ground for the total actual and reasonable cost of gas expecting that the prices of material and delivered to its consumers by the plaintiff, in wages paid for labor will, on the whole, be cents per 1,000 cubic feet of gas sold, before reduced from the wages and prices now begiving effect to miscellaneous operating rev. ing paid by the plaintiff. enue, during the period covered by the proof

69. I find that the manufacture and dissubmitted before me, was and is as follows, tribution by the plaintiff of gas of a thermal aside from any return upon any of the prop- content of not less than 650 British thermal erty owned and used by the plaintiff in the units, during the year 1922, would have cost service of its consumers:

at least 10.28 cents per 1,000 cubic feet of Year Year 12 Months gas made, or equivalent to 11.44 cents per

1922. 1923. 11/30/24. Cost of produc

1,000 cubic feet of gas sold, more than the tion .. $ .68212 $ .60800 $ .528307 cost of production and distribution of the Cost of distribu

gas actually made and supplied during that tion, etc..... .34372 .33830 .334169

year by the plaintiff; during the year 1923, Taxes .07882 .08994 .104014

would have cost at least 6.85 cents per 1,000 Renewals and replacements.. .03500 .03500 .035000 cubic feet of gas made, or equivalent to 7.15

cents per 1,000 cubic feet of gas sold more Total $1.13966 $1.07124 $1.001490 than the cost of production and distribution

If the $1 rate for gas had been in effect of the gas actually made and supplied durduring the years 1922, 1923 and 1924, there ing that period by the plaintiff, and during would have been no net earnings and there- the year ended November 30, 1924, would fore no federal income tax payable or paid have cost at least 4.81 cents per 1,000 cubic during 1922 and 1923, and there would have feet of gas made, or equivalent to 5.43 cents been no taxable income, after allowing for per 1,000 cubic feet of gas sold, more than deductions, during the year 1924. In the the cost of production and distribution of foregoing statement of the plaintiff's actual the gas actually made and supplied during operating expenses under the rates actually that year by the plaintiff. charged, I have not deducted this item of 70. I find that the fair and reasonable federal income taxes, amounting to 1.323 market value of the land (unimproved) owncents per 1,000 cubic feet of gas sold for the ed by the plaintiff and used and useful in its year 1922, and 2.741 cents per 1,000 cubic gas business on the northerly side of Willow feet of gas sold for the year 1923, and 4.199 avenue, between Bay street and Tompkins cents per 1,000 cubic feet of gas sold for the avenue, as of June 1, 1923, and as of the nominal year ended November 30, 1924. present time, was and is at least the sum of

67. The plaintiff derives an income from $135,000. its profits on the sale of appliances, which is 71. I find that the fair and reasonable classified as miscellaneous operating revenue, market value of the land (unimproved) ownand also from the moneys received as rental ed by the plaintiff and used and useful in for a portion of its general office building, its gas business on the south side of Willow and of which the plaintiff gives its consumers avenue, between Bay street and Tompkins

Total...

avenue, as of June 1, 1923, and as of the upon methods of computation of such going present time, was and is at least the sum of value. No testimony was presented by any $7,400.

witness called in behalf of the defendants as 72. I find that of the land owned by the to the amount or method of computation of plaintiff at the corner of Post avenue and the going value of the plaintiff, as of June Clove road, a part only was used and use- 1, 1923, or the present time. I find that the ful, June 1, 1923, in the gas business, and reasonable and necessary going value of the that such part was the portion on which plaintiff in its gas business, as of June 1, plaintiff's gas holder is erected, and which is 1923, and of the present time, was and is at distant about 332 feet from the southwester- least the sum of $644,000. ly corner of Post avenue and Clove road, 76. I find that the cost to reproduce the with a frontage on Post avenue of about 158 manufacturing plant, distributing system feet. I further find that the fair and reason- and other tangible property owned by the able market value of said portion of land, plaintiff, used and useful in its gas business, unimproved, is the sum of $7,600.

as of June 1, 1923, inclusive of working cap73. I find the cost to make plaintiff's ital and going value, was as of June 1, 1923, property as new amounts to $18,281.91 which at least the sum of $5,164,021.42, made up as should be deducted from reproduction cost, follows: and I further find that the cost to reproduce Reproduction cost of property owned by New the manufacturing plant, distributing sys- York & Richmond Gas Company and used tem, and other tangible property owned by

and useful in its gas business as of June 1,

1923: the plaintiff and used and useful in its gas Reproduction cost of tangible propbusiness, as of June 1, 1923, based upon the erty as of June 1, 1923..... .$4,245,021.42 unit prices of labor and material prevailing Investment in working capital reaas of that time, exclusive of working capital

sonably required as of June 1,
1923

275,000.00 and going value, was and is, with the deduc

Investment in going value, as of tion for cost to make as new amounting to

June 1, 1923

644.000.00 $18,281.91, at least the sum of $4,245,021.42, made up as follows:

.$5,164,021.42 Land

.$ 150,000.00

77. From all the facts appearing before Buildings

197,836.55 Mains and services

2,354,152.78 me, I find that the present value of the plainPlant and holders

604,300.00 tiff's property used and useful in its gas Meters

225,000.00 business, as of June 1, 1923, was $4,750,000. Tools and equipment

32,014.00

I find, further, that the plaintiff's property $3,563,303.33

used and useful in its gas business, and the Less cost to make new

18,281.91 present value of such property, has been in

creased and added to, since June 1, 1923, by $3,545,021.42

the net cost of the various additions, imUndistributed costs

700,000.00

provements, and extensions thereto which $4,245,021.42 have been made since June 1, 1923, as herein

after more particularly shown. 74. The plaintiff submitted proofs before 78. I find that the actual reasonable cost me of its average working capital actually of additions, extensions and improvements employed in its gas business, amounting dur- in and to the plaintiff's manufacturing plant, ing the year 1922, to $343,496.63, during the distributing system, and other tangible propyear 1923, to $347,384.23, and during the erty, which should be added to the present nominal year ended July 31, 1924, $384,405.- value of the plaintiff's property as of June 34, and the testimony of expert witnesses 1, 1923, amounted to $54,183.52 during the that the amount reasonably necessary was period from June 1, 1923, to December 31, $344,146. I find that the reasonable and nec- 1923, and to $481,552.90 during the period essary working capital of the plaintiff in its from January 1, 1924, to October 31, 1924. gas business as of June 1, 1923, and as of The withdrawals from the property of the the present time, was and is at least the sum plaintiff used in its gas business, at unit pricof $275,000.

es prevailing as of June 1, 1923, amounted 75. The plaintiff also submitted proofs to $19,971.06 for the period from June 1, before me of the amount of going value pos- 1923, to December 31, 1923, and to $32,683.11 sessed by the plaintiff in its gas business, as for the period from January 1, 1924, to Octoof June 1, 1923, and as of the time of the ber 31, 1924, making a net increase applicatrial, such evidence having been given by wit- ble to the present value of the plaintiff's used nesses called in behalf of the plaintiff, based and useful property of $34,212.46 during the

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10 F.(20) 167 period from June 1, 1923, to December 31, found in the amount of $644,000, was as of 1923, and of $448,869.79 during the period December 31, 1922, $4,592,352.86; as of June from January 1, 1924, to October 31, 1924. 1, 1923, $4,658,551.30; as of December 31,

79. From all the facts appearing before 1923, $4,868,281.55; and as of October 31, me, I therefore find that the present value 1924, $5,212,678.33. of the property owned by the plaintiff, and 81. The minimum investment in the plainused and useful in its gas business, as of De- tiff's property used and useful in its gas cember 31, 1923, was the sum of $5,198,233. business, as found by the court in the prior 88, and as of October 31, 1924, the sum of action of the plaintiff in the Supreme Court $5,647,103.67, including working capital and of the State of New York, Richmond County, going value and additions as herein before to wit, New York & Richmond Gas Company found. I further find that the minimum fair v. Public Service Commission et al., as of value of the property owned by the plaintiff, January 1, 1920, was $2,560,000. The net adused and useful in its gas business and con- ditions made to the plaintiff's property from stituting a rate base on which plaintiff is en- January 1, 1920, to December 31, 1922, were titled to a fair return was as follows:

as follows: As of June 1, 1923...

.$4,750.000.00 January 1, 1920, to December 31, As of December 31, 1923.

4,785,000.00
1920

.$30,767.93 As of October 31, 1924

5,233.869.00 January 1, 1921, to December 31,
1921

. $30,555.56 80. I find that the cost to the plaintiff of January 1, 1922, to December 31, all the fixed capital acquired by it, as shown 1922

.$84,996.70 by its books of account as of January 1, 1920, was $3,393,720.89. The like cost to The work in progress on additions to the the plaintiff of the plant and property ac- plaintiff's property amounted, as of Decemquired by it amounted, on July 15, 1901, to ber 31, 1922, to $133,443.78. I therefore $2,337,234.24. Since July 15, 1901, there find that the minimum investment in the have been erected, installed, or acquired by plaintiff's said property, upon the basis of the plaintiff, and added to its property, and the court's findings in the prior action, tothere were in use in its gas business on Janu- gether with the net additions to the property, ary 1, 1920, certain additional land, plant, was, as of December 31, 1922, at least the apparatus, mains and other property of

sum of $2,839,763.97. which the actual cost to the plaintiff, less

The net additions to the plaintiff's propwithdrawals since July 15, 1901, and exclu- erty from January 1, 1923, to June 1, 1923, sive of working capital, was and is not less amounted to $7,481.66, and the work in than $1,056,486.65, making the total book cost progress on additions to the plaintiff's propto the plaintiff of such property owned and erty amounted as of June 1, 1923, to $192,used by it as of January 1, 1920, at least the 160.56. I therefore find that the minimum insum of $3,393,720.89.

vestment in the plaintiff's said property, upSince January 1, 1920, the net additions on the basis above stated, was, as of June 1, to the fixed capital of the plaintiff (includ- 1923, at least the sum of $2,905,962.41. ing expenditures charged to work in progress

The net additions to the plaintiff's proper. account) amounted, as of December 31, 1922, ty from January 1, 1923, to December 31, to $279,763.97; as of June 1, 1923, to $345,- 1923, amounted to $125,762.26, and the work 962.41; as of December 31, 1923, to $555,- in progress on additions to the plaintiff's 692.66; and as of October 31, 1924, to $900,- property amounted, as of December 31, 1923, 089.44. A credit adjustment was made, in to $283,610.21. I therefore find that the 1921, in the account of fixed capital installed minimum investment in the plaintiff's said after December 31, 1908, amounting to $132. property, upon the basis above stated, was, I find, therefore, that the cost to the plain- as of December 31, 1923, at least the sum tiff of all of its fixed capital acquired by it, of $3,115,692.66. as shown by its books of account, as of De

The net additions to the plaintiff's propcember 31, 1922, was $3,673,352.86; as of erty from January 1, 1924, to October 31, June 1, 1923, was $3,739,551.30; as of De- 1924, amounted to $22,740.22, and the work cember 31, 1923, was $3,949,281.55; and as in progress on additions to plaintiff's propof October 31, 1924, was $4,293,678.33. I erty amounted as of October 31, 1924, to also find that the cost to the plaintiff of all $605,266.77. I therefore find that the minof the fixed capital acquired by it, as shown imum investment in the plaintiff's said propby its books of account, together with work- erty, upon the basis above stated, was, as of ing capital, which I have found in the amount October 31, 1924, at least the sum of $3,460,of $275,000, and going value which I have 089.44.

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