Show r hone cow company any asks for rate increase in utai utah announcement was made yester day by orson john hyde state manager that the mountain states telephone and telegraph company has asked the utah public ser vice commission for authority to revise certa n exchange and toll telephone rates in utah to enable the company to meet increased op aerating expenses and improve net earnings sufficiently to attract ad d dional capital that is required to continue its program of expansion and improvement of its service in the state the company states that although it is handl ng the lar largest gest volume of business in its history of operation in utah its earnings on its intrastate investment in tel ephone plant are lower than at any time since world war I 1 at an annual rate of 2 67 percent on a going basis the present low earnings situa tion Is brought about by expenses increasing faster than revenues labor costs which comprise 65 per cent of total expenses have been the largest of increased costs of doing business wage rates have increased substantially during and since the war due to adjustments comparable to those made in other industries of similar skill labor costs are now consuming 59 cents of every revenue dollar compared to 35 cents in 1941 the cost of nearly everything the company uses in construction and maintain ing its plant and service is sub ly higher some of the it ems listed by the company were poles which had increased 64 per cent copper wire 83 percent and lead covered cable the company states that during the war the extension of its plant was limited to projects that were essential to the war effort and pub I 1 c health and safety and that since V J day the demand for ser vice has been so great that it has not been able to restore the pre war margins in its plant that are necessary for efficient operations and satisfactory service despite the fact that it has carried out the largest construction program in the last two years ever undertaken in the state about and gained nearly 36 telephones a 32 percent increase since V J day there were on october 3 1 1947 near ly orders which could not be completed because of lack of facilities the Comp company anys s en engineers estimate that in order to ta take ke care of present orders on hand and to restore normal margins in plant and provide for replacements and offered business during a five year period ending in 1951 that a gross construction program in the order of will be required the company points out that the new capital required for this pro gram will not come from the in creased revenue requested in the revision of rates all of that will I 1 be needed to maintain good service t to 0 meet operating expenses and interest and dividend requirements in order to attract the additional capital that will be required earn ings will have to be at a rate that will make investment in the busi bust ness attractive the proposed new rates would increase the Comp company anys s total rev denues in utah by approximately 76 a month since federal and anc other income taxes would take 40 percent of this amount net earnings would be improved by about the effect on indi vidual customers will vary consid drably and will depend on the type and the amount of service e they have and the exchange from which they get local service the last general adjustment of telephone rates in utah was in 19 38 most of the adjustments at that time being decreases in general present telephone rates in utah are the same or lower than rates established in 1922 the proposed exchange rates are designed to recognize that there Is some variation in the values as well as the cost of the new service with the number of telephones in an exchange the present intra state toll schedule is adjusted to make it conform more nearly to the intrastate schedule at varying distances and to provide about one fourth of the necessary rev denue |