COMMISSIONERS

EDWIN O. EDGERTON, President

H. D. LOVELAND

FRANK R. DEVLIN

HARLEY W. BRUNDIGE

IRVING MARTIN

EXAMINERS

HARRY A. ENCELL

PHILIP BANCROFT

MYRON WESTOVER

W. J. HANDFORD

W. R. WILLIAMS,

Secretary

OFFICE OF COMMISSION

FLOOD BUILDING, 870 MARKET STREET

SAN FRANCISCO, CALIFORNIA

DECISION No. 6475.

IN THE MATTER OF THE APPLICATION OF MOUNT WHITNEY POWER AND ELECTRIC COMPANY FOR AUTHORITY TO INCREASE ITS ELECTRIC RATES.

Application No. 3891.

(Supplemental.)

Decided July 2, 1919.

VALUATION-RATE BASE-INTEREST DURING CONSTRUCTION.-In computing a rate base for the year 1919, the average operative capital as of June 30, 1919, is included and the capitalization of 1 per cent of the cost of new work is allowed as interest during construction. VALUATION-WORKING CAPITAL, ALLOWANCES FOR.-An electric utility which purchases a large portion of its energy from another utility and has the same time for payment as its consumers, will not be allowed the same percentage of working capital as is usually allowed utilities operating under different conditions.

Present surcharge of 10 per cent in addition to basis rate, at present in effect, is increased to 15 per cent to become effective for all meter readings made on and after July 15, 1919, it being understood that the utility will continue the improvements to its system and render first-class service.

E. C. Farnsworth and Harry J. Bauer, for Applicant.

E. I. Feemster and Guy Knupp, for San Joaquin Valley Public Utility Association, Tulare County Branch.

Frank B. Graves, for San Joaquin Valley Public Utility Association, Kings County Branch.

W. W. Kaye and H. H. Miner, for San Joaquin Valley Public Utility Association, Kern County Branch.

MARTIN, Commissioner.

OPINION.

Applicant alleges that the present rates charged by it for electric service including surcharge of 10 per cent heretofore authorized by this Commission in its Decision No. 5729, dated August 29, 1918 (Opinions and Orders of the Railroad Commission of the State of California, Vol. 15, p. 1113), are not just and reasonable, in that they do not yield applicant a reasonable return upon money invested. in its operative property.

Applicant requests that the Railroad Commission authorize it to charge and collect a temporary surcharge of 15 per cent in place of the present 10 per cent surcharge.

Applicant operates an electric production, transmission and distribution system in Kings, Tulare and Kern counties, distributing electric energy for residence, domestic, commercial and agricultural purposes. Approximately 80 per cent of its business is the service of power for agricultural pumping, the majority of which is in Tulare County. In a portion of the territory it is in competition with San Joaquin Light