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 XV. Elements deserving special consideration when rates are to be fixed

Collection:: Economics Books

ELEMENTS DESERVING SPECIAL CONSIDERATION 201 thereafter, to so adjust rates that, for a suitable period of time, the benefit of the reduced cost will be shared on a fair basis by the owner and the rate-payer. Any treatment less favorable to the owner of a public utility would discourage the introduction of innovations if they involve further investment of capital and would make for inefficient rather than for efficient management. The owner must not be expected to consent to an increase of hazard without an increase of profit. The practice of attempting to foresee obsolescence and of burdening the rate-payer before the failure by obsolescence with the charge that is necessary to amortize the capital which obso- lescence renders useless, is not alone unwise but unjust. It is not fair to the rate-payer because those who pay rates before the betterment is made should not be made to pay for the advantage which will come to those who pay rates after the betterment has been made; it is not fair to the owner because while apparently increasing his earnings it will act, as do all high charges for service, as a deterrent upon the extension of business and because there will be cases where by error in the estimate of time allowance for obsolescence the owner will be called upon to make a sacrifice when, due to obsolescence, property is abandoned, which cannot be offset against the advantage that may come to the owners of other utilities who benefit by an allowance for something which, in their case, never happens. The obsolescence will, in many cases, occur before any adequate provision to meet it has been made. B — Losses From Fortuitous Events Amortization of Losses from Fortuitous Events. — Losses of magnitude which result from floods, earthquakes, volcanic eruptions and the like and in general losses against which the owner cannot insure, belong to a class of sacrifices which, like those due to obsolescence, should be made good to the owner of the utility after the event, by the public, that is to say, by the rate-payers. Such losses cannot be forecast. They should not fall entirely on the owner of the utility. In some fashion and to

Access restriction

Copyright

fullscreen: Valuation, depreciation and the rate base

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation