Valuation, depreciation and the rate base

Bibliographic data

Monograph

Identifikator:: 174667931X

URN:: urn:nbn:de:zbw-retromon-119897

Document type:: Monograph

Author:: Grunsky, Carl Ewald http://d-nb.info/gnd/10180959X

Title:: Valuation, depreciation and the rate base

Edition:: 2. ed., revised and extended

Place of publication:: New York

Publisher:: Wiley

Year of publication:: 1927

Scope:: X, 500 Seiten

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter VIII. The fixing of rates

Collection:: Economics Books

150 VALUATION, DEPRECIATION AND THE RATE-BASE Cotperation Between the Public and the Owner. — The treat- ment of the public service corporation should be such as to en- courage the undertaking of other public service enterprises. It should not be a hard and fast rule that a fixed rate of return will be allowed in all cases. The owner should feel that good man- agement will be rewarded. There is perhaps no better way of securing the desired hearty and cordial cooperation between the owner of the utility and the public than by the introduction of a system of profit sharing. This has been done with apparently great success in Chicago and other cities where revenue in excess of an agreed interest return on an appraisal of street car lines is divided on a reasonable basis between the city and the owner. So, too, in Boston, for every decrease of 5 cents per 1ooo cubic feet in the charge for gas the Gas Company is permitted to increase its dividend rate one per cent. The consumer benefits by the lower rate, the Gas Company by the larger dividend. Attitude of the Public Service Commissions. — Public ser- vice commissions were not created to assume an attitude hostile to the public service corporations. While they must protect the public against excessive charges for the service rendered and must see to it that there will be no discrimination against in- dividuals, they are likewise charged with the duty of allowing the corporations to do business on a fair basis. It must not be expected, however, that mistakes will not be made. As the records to date are read, such mistakes will be found in both directions. On the whole the attempt to be fair is generally recognized and the confidence of the people in their public ser- vice commissions is growing from day to day. The Rate-Base Net Earnings as a Basis of Value. — When there is no com- petition and no restriction by law or otherwise upon the charges which may be made by public utilities for commodities furnished or for service rendered, it is safe to assume that these charges will be fixed on the broad principle of “ all the traffic will bear.” This does not mean all that the rate-payer would be willing to

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