Show VAlUATION FOR fORI fORICA f CA fAR HAlf i I I fT T A T Ut Utah h Light a and d Traction I C Company Property Worth I The fair value of the property 01 ot the Utah Light and Traction company company com com- pany as of June 30 1918 for rate makIng making making mak mak- ing purposes Is 63 according to the findings of ot the public utilities commission made public Thursday The fair service value of ot the property property property prop prop- erty the decision says upon which the customer pays for tor service rendered it s I Present fair value of property as Of ot June 30 1918 Less deferred deterred maintenance 88 Fair alue value for tor rate making purposes purposes pur pur- pos poses s as of ot June 30 1918 64 This value Is found after due consideration con con- of ot all relevant facts Including including ing present service condition and operating operating operating oper oper- efficiency and must necessarily be based upon the re record ord of the case and the Judgment of the commission In Inline Inline inline line with the well established principles of valuation as laid ladd down by commissions commissions commissions commis commis- and courts of the highest juris juris- diction COMPANIES SEPARATE The findings of the commission separates separates separates sepa sepa- rates that part of the company's property property property prop prop- erty used strictly for tor traction pur pur- poses Owing to the nature of its re relations relations relations re- re lations with the Utah Power and Light company the book value of the company company company com com- pany In the past has been In the neighborhood neighborhood neigh neigh- of The commission Is silent slIe-nt as to what it ft considers a fair rate of ot return that the company may earn on the property The last report of the company filed at atthe atthe the close of 1918 after the company I had sustained losses due to the influenza influenza influenza enza epidemic showed that the gross gros Income of the company for the year ear was about 10 per cent of ot what the commission commission commission com com- mission now fixes as a fair rate making value The gross Income for the year 1918 from oper operating t n and revenues revenues revenues reve reve- with operating and a afew afew afew few minor Items was Out of ot this amount the company had to pay interest on funded Indebtedness indebtedness edness and other charges bringing the deductions to 38 leaving a loss for the year of ot 55 OUTCOME OF HEARINGS The present case grows out of former rate hearings brought on application of the traction company When the last rate Increase was granted under a ade decision de de decision cislon of August 9 1918 a valuation of the property was ordered that the commission commission commission com com- mission might have a true basis on which to fix rates The company proceeded proceeded pro pro proceeded with the work on the order of the commission placing V. V T. T Davoud in charge as valuation engineer His report was filed March 18 1919 and placed the value of the company's property on a a. prewar basis of 05 At the war level of prices Mr Ir Davoud said that the property was as asworth worth After Atter Mr Davoud's report had been filed It was examined by the commission commission commission commis commis- sion and Its Us employee and a hearing on the valuation was started May 13 f after which the case was finally submitted submitted sub sub- mUted July 1 I 1919 In the decision of yesterday the Commission in n part When a property has been constructed constructed con con- by successive corporations at Intervals extending over a considerable consider consider- able ables period of ot time It is difficult to ascertain from the corporation records records records rec rec- the actual cost ost for tor forthe the reason that construction accounts were not usually kept according to standard classifications Furthermore at this late lato date If it actual costs were available available available avail avail- able it would be impossible without a check of ot th the physical property to say that the tha money represented by the accounts had bad been wisely spent and th that t no extravagance or waste had en entered entered entered en- en in Into to the construction INVENTORY IS BASIS The report of ot the commission takes up In detail the accounts as presented In the inv inventory It shows that duplication duplication duplication du du- du- du DC of work had bad resulted In in increasing increasing In in- creasing the company's grading ac account account account ac- ac count a as given in its Inventory by about and this is la deducted from the p physical ni al valuation of the property prop prop- erty The construction cost of the property Is found by the commission to be 57 as compared with wilh the I valuation placed by the Utah Light and Traction company on this group of items of ot 38 Ohe Item in this group group Is for paving in which matter LUer the commission accepts the company's figures The rails raUs and fastenings are valued by the commission commission commis- commis sion at approximately The passenger cars of the company are valued by the commission at almost alost alost al- al most ost the same figure as the company itself elf had given just a trifle under The electric equipment of the thears thears thears ars is worth additional In the of the commission Value alue of the pr property pert as found by he commission as of June 30 1918 s a s placed at To this is a going value The report says as 8 PER PER CENT Our use In the foregoing deficit cal- cal of 8 per cent as the rate of re- re urn must not not not-be be understood to imply of ot that percentage of return Bin JD n the property Investments or to Indi late ate what the action of the commission would be bo were the question of a fair j under consideration That per per- was used because it was per per-I the theasia basis asia of which applicants applicant's calculation It f deficit ft was as madeWe made I We are clearly of the opinion says says he commission In another paragraph that no general rule can be lam laid down downor I lor or the determining of an allowance of his character It Is not a mere matter If t f formula and must be made only I pon the best est Judgment of the commis- commis ion after atter consideration of or all relevant ets In conclusion the commission re- re harks Larks A A cu in receiving service rom oat a utility pays pas a Just and reason reason- ble rate for tor good efficient service as utility is permitted to fall fall Blow elow as sea a standard the customer pays my for tor that which he receives the tuai tua tangible depreciation of or the I otherwise deferred lance ance should be deducted I I i I |