Salt Lake Telegram | 1932-07-20 | Page 8 | Utility Holding Companies Hit Blow in Kansas

UTILITY HOLDING COMP COMPANIES ANtES HIT BLOW fLOW IN KANSAS Commission Flays Practice of Taking Cream of 4 Cross Gross Earnings Re By A e Pres fres i TOPEKA Kan July 20 A 20 A severe severe se se- vere condemnation of the practice of or utilities holding companies in taking taking taking tak tak- ing the cream from the gross earnings earnings earn ings of the operating companies was d delivered b by the Kansas public Service ervice commission in deciding on a 25 per cent reduction in natural gas rates collected at the gates of ot 10 cities by the Cities Service Gas com com- pany The commission today was was' preparing preparing pre pre- paring a formal order to reduce the rates charged by the pipe line company com corn pany pang from cents a thousand cubic feet to cents Attorneys for the company indicated the reduction would be resisted in the courts About customers arc are served in the cities affected In considering costs of service the commission disallowed the engineering engineer engineer- ing and management fee of 4 13 per percent percent percent cent of the gross earnings which it developed the Cities ClUes Service Gas company and other Doherty operating operating operate ing companies pay to Henry L. L Doherty Doherty Do- Do herty CoIt CoIt Co It is a scheme to take the cr cream am from the gross earnings of the operating operating op- op crating companies leaving them the skimmed milk for sustenance the commission said The money taken for which no service is return returned cd may at times be the money needed to sustain the operating company it may mean the difference between solvency and bankruptcy This unearned unearned unearned un un- un- un earned money is filched from the pockets of the consumers docs does not go to the stockholders and unjustly enriches the management company The majority opinion said Henry L. L Doherty Co devoted its activities activities activities ties largely to purchase and sale of Cities Service securities and it appeared appeared ap ape ap- ap any additional contact with the subsidiaries was for the protection protection protection tion of the investments of Henry Henr L. L Doherty rather than for a direct benefit to the distributing and pipe pipeline pipeline pipeline line Further the commission condemned as burdensome the 5 per cent paid by subsidiaries to Henry L. L Doherty It Co on On the cost of all construction construction construe construe- tion projects ts and nd the fact that they must immediately transfer all their receipts to Henry L. L Doherty Co leaving them dependent upon it for financial assistance for which they must pay