CALIFORNIA RAILROAD COMMISSION DECISIONS. DECISION No. 1189. CITY OF ONTARIO, A MUNICIPAL CORPORATION, vs. ONTARIO-UPLAND GAS COMPANY. Case No. 458. Decided January 3, 1914. Held, That the present rate of defendant of $1.75 per thousand cubic feet is unjust and unreasonable. Minimum monthly rate of 50 cents established and a rate of $1.25 per thousand cubic feet ordered into effect. Isaac Jones, for Complainant. Avery & French, for Defendant. REPORT OF THE COMMISSION. ESHLEMAN, Commissioner. The complainant in this case alleges that the rates charged for gas supplied by Ontario-Upland Gas Company to the inhabitants of the city of Ontario are unjust and unreasonable and requests that this Commission establish fair and equitable rates at which such gas shall be sold. City of Ontario is a municipal corporation of the sixth class, having been incorporated under general laws in 1891. On July 29, 1913, at an election duly called and held, the city of Ontario voted not to retain its powers of control over certain classes of public utilities and thereafter, as provided by law, the power of control over the defendant company was vested in this Commission. On August 25, 1913, the board of trustees of the city of Ontario passed a resolution authorizing the present action, and subsequently, on September 2, 1913, the complaint in this case was duly filed with the Commission, The franchise under which gas is now being distributed by the defendant company in the city of Ontario was granted by the board of trustees of said city by Ordinance No. 190 on March 2, 1909. This franchise provides for a gross revenue tax of 2 per cent to take effect five years from the date of grant. The effect of such tax upon future expenses has been considered. Ontario-Upland Gas Company was incorporated on March 13, 1909, with an authorized capital of $100,000.00 divided into 100,000 shares of $1.00 each. Of the authorized capital stock it appears that at least 88,995 shares have been issued as follows: 21,524 shares állotted to subscribers at 50 cents per share---- 25,000 shares allotted as fully paid to J. R. Anderson_ 88,995 shares $10,762 00 5.00 21,233 00 $32,000 00 The difference between the cash or other consideration received on the above issue of the 88,995 shares of capital stock and the par value of the stock so issued amounting to $56,995.00 is carried on the books as "Cost of Franchise." The authorized bonded indebtedness of defendant company is $25,000.00 and this entire amount has been issued and allotted to J. R. Anderson in part payment for supplying and erecting the gas plant in the city of Ontario and laying street mains in Ontario and Upland. The bonds bear interest at 7 per cent and are redeemable on June 1, 1921, at par. The issue is secured by a certain trust deed which however does not contain any arrangement for the redemption of the bonds, nor has defendant company made any provision for paying them off at maturity. It will be noted that the total face value of stocks and bonds delivered to J. R. Anderson in payment for the gas plant and distributing system acquired by the Ontario-Upland Gas Company was $92,446.00, although 42,446 shares of stock, as above noted, were allotted to said J. R. Anderson on the basis of 50 cents per share and 25,000 shares in addition appear to have been in the nature of a bonus. This will closely correspond to the value of the plant and street mains acquired as carried on the books of the company prior to December, 1912. Service in Ontario was inaugurated in July, 1909, and since that date defendant has been continuously engaged in the manufacture of gas and its distribution in the incorporated towns of Ontario and Upland. The gas manufacturing plant of the Ontario-Upland Gas Company is located in the outskirts of the city of Ontario, and consists of two 4-foot Beals gas generators, with the necessary scrubbers, purifiers and accessory equipment. The rated output.capacity of the plant is C 10,000 cubic feet per hour, but the actual maximum daily capacity probably does not exceed 180,000 cubic feet of gas. The storage equipment consists of one 30,000 cubic foot (capacity) steel holder. The present purifier capacity appears to be inadequate, and provision is now being made to install an additional unit, with necessary piping, which will insure complete purification even with a largely increased output. The maximum daily demand on the manufacturing plant has not, up to the present time, exceeded about 90,000 cubic feet, and inasmuch as the present generator capacity is sufficient to take care of double this maximum demand it will be evident that with increased purifier capacity the plant should be ample for the needs of the territory served until the daily demand for gas has increased 100 per cent. The holder capacity, while only sufficient to carry the maximum demand for a few hours in the event of the plant being entirely disabled, is thought to be ample because the possibility of both generators becoming inoperative at the same time is very remote. The gas is generated intermittently, purified and stored in the holder at about five-inch (water) pressure, which is sufficient to maintain an adequate pressure at consumers' meters except during the three daily peaks, when it is necessary to operate a small booster. This booster raises the pressure at the plant to about fifteen inches (water), and serves to compensate for the drop in pressure due to the heavy demands over the peak periods. From the plant the gas is transmitted through a six-inch main to the distribution center in Ontario from where it is distributed to the various consumers through five, four and two-inch laterals. The six-inch transmission main is continued in a northerly direction to the town of Upland, being tied in with a four-inch loop line at about the northern limits of Ontario, and a similar system of distribution laterals has been laid in Upland. Where possible all mains and laterals have been laid in alleys to avoid subsequent paving expense, and the entire plant appears to be in excellent operating condition. As to the quality of the gas produced at the Ontario plant no reliable data appears to be available. No analysis has been made to determine the composition of and impurities in the gas, and no tests have been made to ascertain its calorific value. Defendant company now has in service some 971 meters, of which about 70 per cent are connected with the Ontario distribution system and approximately 30 per cent with the distribution system in Upland. The gas sold during the year 1912 was about 17,060,900 cubic feet and 9,137,300 cubic feet during the first six months of 1913. Assuming |