Utility bill

“ The completion of a large public utility, planned on such a scale as to provide for the requirements of many years to come, utilizing but part of its capacity, and earning less than its operating expenses and fixed charges, with its rates of toll fixed by law, must be considered in a different way than a well-established public utility, with business forcing it to its utmost capacity, and with tolls not fixed by law. ”

“ A public utility is entitled to such rates as will permit it to earn a return on the value of the property which it employs for the convenience of the public equal to that generally being made at the same time and in the same general part of the country on investments in other business undertakings which are attended by corresponding, risks and uncertainties ”

“ But no one would question that the reasonable cost of an efficient public utility system 'is good evidence of its value at the time of construction.' We have said that 'such actual cost will continue fairly well to measure the amount to be attributed to the physical elements of the property so long as there is no change in the level of applicable prices.' McCardle v. ”

“ Whenever any local distributing company or concern, whose rates have been fixed by any municipal government, desires a change of any of its rates, rentals or charges, it shall make its application to the municipal government where such utility is located and such municipal government shall determine said application within sixty days after presentation unless the determination thereof may be longer deferred by agreement. ”

“ It may also be that so much of the depreciation reserve as has not been used for retirements or replacements should be subtracted from the present value of the utility's property in determining the rate base, on the theory that the amounts thus contributed by the public represent a part payment for the property consumed or to be consumed in service. ”

“ No local government shall be prohibited by the legislature (1) from making a fair return on the value of the property used and useful in its operation of a gas, electric or water public utility service, over and above costs of operation and maintenance and necessary and proper reserves, in addition to an amount equivalent to taxes which such service, if privately owned, would pay to such local government, or (2) from using such profits for payment of refunds to consumers or for any other lawful purpose. ”

“ The commonest object of private bills is to enable private individuals to enter into combination to undertake works of public utility—the building of railways or tramways, the construction of harbors or piers, the draining of swamps, the supplying of water, gas, or electricity, and the embarking upon a wide variety of other enterprises which in the United States would be regulated chiefly by state legislatures and city councils—at their own risk and, in part at least, for their own profit. ”

“ Long before the Federal Government could be stirred to regulate utilities, courageous states took the initiative and almost the whole body of utility practice has resulted from their experiences.
We must not forget that regulatory measures are temporary expedients, not eternal verities-if indeed they are verities at all. Certainly one of the matters on which the states might well be indulged-the right to an opinion of their own-is as to the accounting methods of a utility whose whole property and business being accounted for is within the state. ”

“ The rates of utilities are determined by law and are set at a level designed to allow a fair return on a rate base that includes the cost of furnishing the service, plainly including in this case the cost of gas purchased from the pipelines and resold to customers. It is fanciful, at least unrealistic, to think that a utility entitled to pass on to its customers the cost of gas that it has purchased will not do so to the maximum extent permitted by law. Furthermore, petitioners assert that in this case the applicable law requires that such cost be passed on to consumers. ”

“ Capital charges cover the allowance, by way of interest, for the use of the capital, whatever the nature of the security issued therefor, the allowance for risk incurred, and enough more to attract capital. The reasonable rate to be prescribed by a commission may allow an efficiently managed utility much more. But a rate is constitutionally compensatory, if it allows to the utility the opportunity to earn the cost of the service as thus defined. ”

“ And where a city, empowered by the state so to do, makes a contract with a public utility fixing the amounts to be paid for its service, the latter may not be required to serve for less even if the specified rates are unreasonably high. ”

“ To withhold from a public utility the privilege of including a depletion allowance among its operating expenses, while confining t to a return of 6 1/2 per cent. upon the value of its wasting assets, is to take its property away from it without due process of law, at least where the waste is inevitable and rapid. The commission has found that the life expectancy of the operated gas fields is only there years and two months. ”

“ But, so long as the specific items of property are employed by the utility, their exchange value is not of legal significance.
The investor agrees, by embarking capital in a utility, that its charges to the public shall be reasonable. His company is the substitute for the state in the performance of the public service, thus becoming a public servant. The compensation which the Constitution guarantees an opportunity to earn is the reasonable cost of conducting the business. Cost includes, not only operating expenses, but also capital charges. ”

“ There is no principle to sustain a holding that a utility may earn on the present fair value of its property devoted to public service, but that it must accept and the public must pay depreciation on book cost or investment cost, regardless of present fair value. We repeat, the purpose of permitting a depreciation charge is to compensate the utility for property consumed in service, and the duty of the commission, guided by experience in rate making, is to spread this charge fairly over the years of the life of the property.' And see Southwestern Bell Tel. ”

“ The need for uniformity in the enforcement of the Act is acute-to avoid inequality in burden and sacrifice; to weigh the odds for success as heavily as possible on the side of the public interest. The other exemptions in the Act apply uniformly throughout the country-wages, insurance rates, theatre admissions, fees for professional services, and the like. If the 'public utility' exemption is confined to the traditional classes of utilities, substantial uniformity will be obtained as they are almost universally subject to rate regulation in the States. ”

“ The Supreme Court of Kansas, in applying the statute, recognizes that a contract for rates with a public utility cannot be abrogated, except after a finding by the Commission that they are unreasonable. ”

“ Sound business management requires that, after paying all expenses of operation, setting aside the necessary sums for depreciation, payment of interest, and reasonable dividends, there should still remain something to be passed to the surplus account, and a rate of return which does not admit of that being done is not sufficient to assure confidence in the financial soundness of the utility to maintain its credit and enable it to raise money necessary for the proper discharge of its public duties. ”

“ Normally, the unit for rate-making purposes, we may assume, would be the entire interconnected operating property of a utility used and useful for the convenience of the public in the territory served, without regard to particular groups of consumers or local subdivisions. ”

“ Ames, the rate base of a utility were fixed at the amount prudently invested, the inevitable errors incident to estimating service life and net expense in plant consumption could never result in injustice either to the utility or to the community. ”

“ The section contained the following provision as to rates: 'Provided further, that . . . the mayor and council of any such city shall at all times during the existence of any such grant, contract, or privilege have the right by ordinance to fix a reasonable schedule of maximum rates to be charged for water for public and private purposes by any such person, company, or corporation. ”

“ When no rate is fixed by the laws of the state, or territory, or district, the bank may take, receive, reserve, or charge a rate not exceeding seven per centum, and such interest may be taken in advance, reckoning the days for which the note, bill, or other evidence of debt has to run. ”

“ A collapse of public utility values might result. And the impairment of public utility credit might be followed by the cessation of extensions and new undertakings.↑ The community may, of course, demand, in respect to financing, as in respect to operation, that the right to earn a fair return be limited by the requirement that reasonable efficiency be exercised.↑ Of course, any one who chances to have money to invest, when money rates are high, gets the advantage incident to investing in a favorable market. ”

“ Thomas E. Watson, New York.
Dear Sir: I am a regular reader of your Magazine, which I find very interesting and instructive. I believe in the Public Ownership of Public Utilities, but fear that does not go far enough to cure the land of the evils that now curse it. With Government banks, Government railroads, Municipal Ownership of Public Utilities, there would still be that awful strife of the many for bread and butter. If we may ride cheaper on the “Railhighways,” if we get our Water, Gas, and Electric Light cheaper, will not the wages of the workers go down as the cost of living decreases? ”

“ Transactions under public utility tariffs, if the Board determines that a State regulatory body regulates the charges for the public utility services involved, the charges for delayed payment, and any discount allowed for early payment. ”

“ The applicable State regulatory authority will seek to implement, in appropriate proceedings for each electric and gas utility, with respect to which the State regulatory authority has ratemaking authority, a general policy that ensures that utility financial incentives are aligned with helping their customers use energy more efficiently and that provide timely cost recovery and a timely earnings opportunity for utilities associated with cost-effective measurable and verifiable efficiency savings, in a way that sustains or enhances utility customers' incentives to use energy more efficiently. ”

“ There is no statutory obligation on municipalities to provide for depreciation of electricity supply undertakings, but after providing for all expenses, interest on loans, and sinking fund instalments, the local authority may create a reserve fund until it amounts, with interest, to one-tenth of the aggregate capital expenditure. Any deficiency when not met out of reserve is payable out of the local rates. ”

“ No such presumption attends rates which have been fixed pursuant to rate orders of the Commission. Nor can we make any such presumption as respects rates fixed by the utilities themselves without the compulsion of a rate order. For experience does not indicate that utilities are wont to charge themselves out of business. ”

“ Section 20 provides that, whenever any public utility shall desire to make a change in any rate or rates, it shall file with the Commission a schedule showing the changes desired to be made and put in force by such public utility, but that no change shall be made in any rate without the consent of the Commission, and within 30 days after such changes have been authorized by the Commission copies of such schedule shall be filed in every station, office, or depot of such public utility for public inspection. ”

“ We reason from these opinions that in Texas a utility franchise is a contract, with an express or implied provision that the rate schedules are subject to regulation by the city. In such a contract an agreement by the utility to lower rates under specified conditions is binding, although the rule as to the reserved power of regulation prevents the city from agreeing not to raise or lower rates. ”

“ If the city business of gas or electric lighting is to be carried on at a profit, then those citizens who use gas or electric light will be charged a high price for that light, in order to pay the profit, not only to themselves, but also to those who do not use it. If the works are to be carried on at a loss, then the citizens who do not use the gas or electric light will pay taxes to furnish a convenience or economy to those citizens who do use it. ”

“ The prices charged by a joint authority are to be so fixed that the receipts shall be sufficient to cover expenditure with such margin as the electricity commissioners may allow; and the commissioners may require such modifications in prices charged by authorized undertakers as will secure that the benefit of any reduction in the cost of electricity to the undertakers or in the capital employed shall accrue to consumers. ”

“ Taxes are levied for the support of government, and their amount is regulated by its necessities. Tolls are the compensation for the use of another's property, or of improvements made by him; and their amount is determined by the cost of the property, or of the improvements, and considerations of the return which such values or expenditures should yield. The legislature, acting upon information received, may prescribe, at once, the tolls to be charged ”

“ You may have anything you like in the way of Energy served out to you, but the amount of it is debited to your account immediately, and the bill has to be discharged by paying an equivalent in some other form of Energy before you can remove the goods from the counter. ”