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Show THE Kilowatt Maneuvers (Continued from page 1) pany eould stand. It was brought out that sales of electrical energy to Utah Copper Company constitute approximately 50 per cent (49.2%) of the total business of the Power Company in Utah. Dr. Gadsby admitted that the Copper Company enjoyed a rate of 5. 2 mills per kilowatt- hour in 1941 and 1942, a rate far below the rate to industrial and residential users. Cross examination by Mr. Joseph disclosed that Utah Copper Company bought 453,463,000 kilowatt hours in 1941 for which it paid the Power Company a total of $2,354,947. Dr. Gadsby asserted that the service to Utah Copper in 1941 was rendered at a net operating cost of $954,147, or 2.1 mills per kilowatt hour. He also testified that the Company’s net operating income, before taxes and capital charges, arising from its sales to Utah Copper Company was $1,400,800 in 1941. With the impending loss of that attractive business Dr. Gadsby urged that this is no time to imperil the safety of the Company by inflieting a million-dollar rate slash on it. But Mr. Joseph quickly showed the sad picture drawn by Dr. Gadsby to be merely a kilowatt mirage—elusive, highly fictional, and calculated to mislead the Commission and the public. Mr. Joseph’s questioning established the following facts relative to the loss of Copper business: (a) That the sales were available for virtually maximum electrical production of the Power Company to customers other than Utah Copper Company. (b) That sales Utah Copper and therefore Power (C) to customers other than would be at a higher rate more lucrative to the Company. That the financial position of Utah Power & Light Company would be improved rather than injured by loss of the Copper account. That sales to other customers (at prevailing rates) of one quarter of the electrical energy released by termination of the Copper contract would easily offset the loss of the entire Cop- SEARCHLIGHT Checkmated per business. (e) That sales of electricity to Government projects and war industries would be compensated fairly—at rates much higher than the Copper rate of 5.2 mills. (f) That the Power Company, on other occasions, had advised its security holders that loss of the Copper load would actually benefit the Power Company and increase its revenues. (2) That the issue of losses by reason of the termination of the Copper contract was wholly fictional and contrary to any valid presentation of facts. Mr. Joseph read into the record excerpts from the Company’s report to stockholders dated April 25, 1942, as follows: ““To offset the ultimate loss of this low priced (Copper) business, substantial savings will be made in operating costs by curtailed use of less efficient steam plants and reduced payments for purchased power. The Company is fortunate in being reheved of making a large additional investment to meet other load requirements for the war period, which would have been unavoidable had it been necessary to continue carrying the full Copper Company load. ‘There is now a better market for the electricity which will become available for sale as the transfer of load takes place. Everything considered, it would appear that under present conditions, it is to the financial advantage of vour Company to be relieved of this load at the low price at which it is now being supplied.’’ Mr. Joseph also introduced in evidence a letter from Dr. Gadsby of like import, addressed to stockholders of the Power Company on October 1, 1941. Dr. Gadsby admitted that both of the foregoing were ‘‘valid statements.’’ Much of the discussion centered around the Power Company’s exhibit No. 31, which purported to show losses to the Power Company through termination of the Copper Company contract. Its contradictory and fictional (Continued on following page) |