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 XI. The value of a water-right and of reservoir and watershed lands

Collection:: Economics Books

THE VALUE OF WATER-RIGHTS 2:3 Effect of Various Factors on Reservoir Value. — Too much weight is sometimes attached to the influence of the cost of developing a water supply upon the market value of the land which is to be acquired to make the water development possible. Whether this cost be great or small, the custom prevails of allowing the owner of the water-works to recover, in the earn- ings, the cost of operation including replacement requirements and interest on the cost of structures. Whenever, therefore, the necessity of using the land is unquestioned, the cost of develop- ing the water should have but little effect on the market value of the reservoir land. The amount of the water made marketable is, on the other hand, a circumstance which will have greater or less effect on this value, depending upon the value which will be allowed in the rate-base for the developed water-right. There are cases, too, in which the nearness of a storage site to the place of use may give it special value, due to the fact that it adds to the reliability of the service and, finally, there will be cases in which the property to be used for water storage or already in use as a reservoir has acquired greater value for residential or other purposes than, by any fair line of reasoning, could be determined for its use in developing or storing water. When this is the case, the market value of the reservoir land (always to be distinguished from the amount at which it is included in the rate-base) is determined by the other uses to which it might be put. If such a reservoir is a necessity and no other equivalent structure can be substituted for it, the appraisal of market value would be fixed by these other uses. If on the other hand it is possible to substitute for the reservoir some other structure located elsewhere, and costing less though of equivalent service value, then in the case of the constructed reservoir the time will have come when its use should be dis- continued or in the case of the reservoir site, not yet in use, the project plans should be so modified as to eliminate the reservoir. It may be well to repeat that when dealing with water not yet developed, proper allowance must be made in all appraisals 2 ls 4

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