6. RATE BASES; VALUATION

9.64 General Provisions.

The powers and duties of the commissions to establish physical valuation of the public utilities within their jurisdiction have received considerable attention at the hands of the legislatures throughout the states. Power of the commissions to make valuations from time to time as may be necessary to a proper administration of the law is provided in:

In addition to these states, it is made the duty of the commission to determine the value of all public utilities within its jurisdiction in :

In the case of public utilities other than railroads, the commission may make such valuations, and upon request of the public utility it is its duty so to do.

9.66 Same.

Idaho:

Public utilities other than railroads are required to file within six months after the act takes effect an inventory of their property, showing the exact location, the cost of construction, the depreciation charges incident thereto since construction, or if in the opinion of the commission such cost and charges cannot be determined, it may show the cost of replacement. In case of failure of the utility so to file, the commission may make the inventory and computation and charge the cost thereof to the utility.

The commission is directed in fixing rates to take into consideration the value of the property if the same is proved.

9.68. Same.

West Virginia:

The law makes it the duty of the commission to collect, annually, full and complete information as to the value of all property, and to tabulate the same in statistical form and furnish it to the board of public works.

9.69 Conclusiveness of Valuations Made by Commission.

In several of the states the valuations made by the commission are conclusive on the public utility affected, and are made so by first permitting the public utility to be heard in relation thereto and to appeal from the findings of the commission to the courts. The failure of the utility to protest against the findings made by the commission or to appeal therefrom to the courts concludes the right of the public utility to object to the use of the valuation found in any action or proceeding in which it may be concerned, and if it appeals to the courts, the decision of the court stands conclusive as res adjudicata. The valuation thus fixed becomes the future basic valuation of the property of the public utility, unless modified by revaluation of the commission.

9.70 Same.

Washington:

The law provides that the commission, in order to make the valuation required by the statute, is authorized to hold hearings upon at least thirty days' written notice to the public utility, at which the utility shall have the right to be heard. After hearing, the commission is required to make and render findings of fact concerning all of the matters into which it is directed to inquire and upon all matters tending to show the value of the property used by the company for the public convenience. From such findings the public utility is given the right of appeal to the superior court in the county where the hearing was held, and if such court finds the findings made by the commission to be "unjust, incorrect, unreasonable, unlawful or not supported by the evidence," it shall make new and proper findings, and from

its decision either the public utility or the commission has the right of appeal to the supreme court, which shall likewise review the findings made by the lower court and may make new and proper findings or remand the case to the superior court with instructions so to do, or if evidence was improperly rejected, it may remand the case to the commission with instructions to receive the evidence and make findings in accordance therewith. The findings of the commission, or as they may be corrected by the courts, when properly certified, shall be admissible in evidence in any action, proceeding or hearing, except as to matters with respect to assessment and taxation, and shall be conclusive evidence "of the facts stated in such findings as of the date therein stated under conditions then existing, except as a basis for taxation, and such facts can only be controverted by showing a subsequent change in conditions bearing upon the facts therein determined.” In a similar manner the commission is authorized to make valuations and subsequent findings in relation to additions, extensions, and improvements.

9.71 Similar Provisions.

The provisions of the Washington law, which have been outlined in the preceding paragraph, have been, in substance, adopted in Arizona, Colorado, Missouri, and Utah. In North Dakota and Ohio substantially the same provision has also been enacted, and in those states an additional procedure is prescribed by which public utilities are required to file inventories and items of value and information bearing thereon as specified in the statute and upon which the commission is directed to proceed to make a valuation and to give to the public utility affected notice of its conclusions, before the same are made final, and an opportunity to be heard, provided a protest thereto is filed within thirty days after such notice. If no protest is filed, such conclusions shall become final and prima facie evidence of the facts contained therein; and if protest is filed, hearings shall be held and after such hearings, such conclusions and findings as the commission shall then make shall likewise become prima facie evidence of the facts contained therein.

9.72 Wisconsin and Oregon:

The commission is directed to make a valuation of the property of public utilities other than railroads and to hold hearings thereon, and is authorized to make revaluations at any time on its own initiative.

9.73 Nebraska:

Upon the completion of the valuation required, the commission is directed to notify the railroad and set a hearing between thirty and sixty days thereafter, at which time the railroad shall be given an opportunity to be heard.

9.74 Alabama:

Upon completion of the valuation required of utilities other than railroads, the commission is required to notify the utility, which may protest within thirty days, and in case of protest, hearing shall be held and final valuation fixed by order, from which appeal may be taken to the courts. Such valuation when finally fixed becomes a permanent public record and the basic valuation of the property for future rate making purposes.

9.75 Texas and Maryland:

The laws also contain a provision of notifying the public utility affected of the valuation and to hold hearings only upon protest thereto. In Maryland such protest must be filed within a reasonable time as allowed by the commission, and in Texas within forty days. In Maryland all valuations which become final, either by failure of the public utility to protest or by order of the commission after a hearing held upon such protest, become prima facie evidence of the value of the property in any proceeding under the public utility law.

9.76 Items to be Determined in Fixing Value.

In general, in making its valuations, the commission is directed to determine the fair and reasonable value of the property of the public utility used and useful for the convenience of the public. In Georgia the commission is empowered to ascertain the cost of construction and the present value of the property.

9.77 Same.

Washington:

The commission shall ascertain, as early as practicable, the cost of construction and equipment, the amount expended in permanent improvements, and proportionate amount of such permanent improvements charged in construction and to operating expenses respectively, the present as compared with the original cost of construction, and the cost of reproducing in its present condition the property of every public service company.

It shall also ascertain the amount and present market value of the capital stock and funded indebtedness of every public service company.

It shall also ascertain in the case of companies engaged in interstate business, the relative value of the use to which such property in this state is actually put in the conduct of interstate business and state business respectively.

It shall also ascertain the total market value of the property of each public service company operating in this state used for the public convenience within the state.

It shall also ascertain the time intervening between the expenditure of money in the cost of construction and time when returns in the shape of dividends were first received by each of these companies.

It shall also ascertain the probable earning capacity of each public service company under the rates now charged by such companies and the sum required to meet fixed charges and operating expenses, and in case of a company doing interstate business it shall also ascertain the probable earning capacity of such company upon intrastate business, and the sum required to meet fixed charges and operating expenses on intrastate business, and the relative proportion of intrastate and interstate business, the relative proportion of the operating expenses connected therewith, the relative proportion of the revenue which should be derived therefrom.

It shall also ascertain the density of traffic and of population tributary to every public service company, and the conditions which will tend to show whether such traffic and population is likely to continue, increase or diminish.

It shall also ascertain the existence of grades, curvatures and other physical conditions affecting the movement of traffic and business of common carriers.

It shall also ascertain whether the expenditures already made by any public service company in procuring its property were such as were justified by the then existing conditions, and such as might reasonably be expected in the immediate future and whether the money expended by such company has been reasonable for the present needs of the company and for such needs as may reasonably be expected in the immediate future. -Remington's Comp. Stats. of Wash., 1922, Sec. 10441.

9.78 Same.

Wisconsin:

The commission shall ascertain, as early as practicable, the amount of money expended in the construction and equipment of every railroad, the amount of money expended to procure the right of way, also the amount of money it would require to secure the right of way, reconstruct the roadbed, track, depots and other facilities for transportation, and to replace all