THE VALUE OF WATER-RIGHTS IS 
already fully developed and is in use or is being supplied to a 
market which takes it all. But when the power is undevel- 
oped, some consideration must be given to the uncertainty of 
achieving the expected results and due allowance must be made 
for the time that will have to elapse before a return from the 
sale of power can be realized. 
There will, of course, be cases in which an analysis of the cost 
of generating and delivering power will show the advantage to 
be with the power developed by steam. In such cases the 
hydro-electric enterprise may nevertheless be a legitimate one. 
It may have been initiated when the price of fuel for generating 
steam was such that the advantage of cost was temporarily with 
the water-power; or the margin in favor of the steam-power may 
be so small that the recognized advantage and economic value 
to society in conserving the energy which annually reappears 
in the water of the stream outweighs any financial disadvantage 
that may appear from a comparison with steam as a source of 
power, and justifies earnings that might not under other cir- 
cumstances be considered reasonable. 
Furthermore, if the market for the output of a hydro-electric 
installation has been established, there is no certainty that the 
market of a competing plant, at a different cost and sale price 
of power, would be the same. This is a circumstance which 
should be duly weighed in making the comparison. 
In any event, the owner of such utility should be recognized 
as engaged in a meritorious enterprise, deserving not only ade- 
quate protection, but also such reward for having developed 
the water-power and having made an investment for the benefit 
of the public as the circumstances may justify. Under this 
view, even when the water-right which makes the development 
of power possible would appear to be without market value at 
current fuel prices, it will be reasonable to allow to the owner, 
not alone a rate-base increment equal to the cost of securing 
the water-right, if there has been any such cost, but also, if this 
cost has been legitimate and reasonable, some excess allowance 
in the earnings, perhaps proportional to the amount of power 
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