Chambers Electric Light & Power Company
Truro Electric Company
Service area: The Town of Truro, Nova Scotia, and adjacent parts of the County of Colchester.
The Truro Electric Company was incorporated by chapter 108 of the Acts of the province of Nova Scotia for 1887, for the purpose of furnishing electric current, chiefly for arc lighting.
The Chambers Electric Light & Power Company was incorporated by letters patent dated 9 February 1889.
All the rights and franchises of the Truro Electric Company were purchased in 1889 by the Chambers Electric Light & Power Company. Chapter 130 of the Acts of 1889 refers to the proposed purchase by the Chambers EL&P Company and extends the objects of the company.
The electric plant, owned and operated by Chambers Electric Light & Power Company, was acquired by the Town of Truro on 1 August 1916.
Section 6 of chapter 130 of the Acts of 1889, as amended, reads as follows: The Chambers Electric Light & Power Company "is hereby empowered to erect and place upon and along the streets, ways, and other necessary places and highways in the town of Truro, and also in the county of Colchester, poles or other necessary supports with wires thereon for the transmission of electric currents for purposes of the company's business, but not to interfere with the Nova Scotia Telephone or Western Union Telegraph wires now erected in Truro, and no person or corporation shall erect or place any electric light or other wires within three feet of the wires of the company."
On 26 August 1892, a legal document titled Supplementary Letters Patent was issued by the provincial government to the Chambers Electric Light and Power Company, authorizing an increase of the Company's maximum capital stock from $40,000 to $80,000.
Source: Page 14 of Appendix 12,
Journal of the Legislative Council of Nova Scotia, 1893
The Mather Electric Company, Manchester, Conn., reports a marked and very satisfactory increase in orders since the passing of the new tariff bill was perfectly assured. Its sales for lighting apparatus alone since then includes an order from Chambers Electric Light and Power Company, Truro, N.S. for one 500-light dynamo...
— The Electrical World, New York, v24 n10, 8 September 1894
The Mather Electric Company's incandescent electric lighting system
In a report dated 9 January 1914, the PUB wrote: "The Chambers EL&P Co. was one of the pioneers" in the use of electricity for lighting in Nova Scotia. "That branch of the business began as an adjunct to the wood-working business of Chambers & Layton. Early in 1887 the present company was formed ... and took over the electrical business. Later in the same year, under special legislation, it absorbed the Truro Electric Company, a rival concern, which had been established in Truro for the purpose of furnishing electric current, chiefly for arc lighting... The present Chambers EL&P Co. at one time conducted a coal business, later and to some extent at least up to the date of the hearing, a furniture store, a laundry business, and a garage." The laundry business was located close to the generating plant, and used steam from that plant in the laundry operation. In preparation for the hearing, the Company had produced an estimate of the expected cost of coal for fuel during the year 1914, using a working figure of about 17 pounds of coal per kWh, but the PUB decided that 12 pounds per kWh was a better estimate, and correspondingly revised the 1914 operating expense figures. Voltage readings of the Company's lines showed that "in the course of a few months (in 1913) voltages ranged from 112 to 142, a state of things which is quite inconsistent with efficient service". The Chambers EL&P Co. reported that, during the year 1912, its operating revenue was $32,764 and operating expenses were $22,534, taxes were $764, interest on funded debt was $946 and it paid out $6,000 in dividends on capital stock of $100,000. The electric plant, originally owned and operated by Chambers Electric Light & Power Company, was acquired by the Town of Truro on 1 August 1916.
In the case of Attorney General versus Chambers EL&P Company, heard in 1913 in Nova Scotia, Justice Ritchie delivered a decision dated 21 November 1913, that included the following:
Section six of chapter 130 of the Acts of 1889, as amended, reads as follows:
The Chambers EL&P Company is hereby empowered to erect and place upon and along the streets, ways, and other necessary places and highways in the town of Truro, and also in the county of Colchester, poles or other necessary supports with wires thereon for the transmission of electric currents for purposes of the company's business, but not to interfere with the Nova Scotia Telephone or Western Union Telegraph wires now erected in Truro, and no person or corporation shall erect or place any electric light or other wires within three feet of the wires of the company...
The Chambers EL&P Company has the right to erect and maintain their poles and wires in the streets of the town of Truro, but not the exclusive right. The Town has the right under the Towns Incorporation Act to light the streets and this is what the town of Truro proposes to do. Poles have been erected by the town for their wires for the most part on the side of the street opposite to the side on which the Chambers EL&P Company's poles are erected, but at certain places the wires must cross.
The town poles are lower than those of the Chambers EL&P Company but its wires as proposed will not at any place come within three feet of the Chambers EL&P Company's wires.
On the 10th September 1913, the Chambers EL&P Company noticing the action of the town to which I (Justice Ritchie) have referred, wrote a letter to the mayor and town council in which the following appears:—
“We notify you that we claim the right to go as low as any wire is permitted to go, and will at once shift our wires to as low a position as we see your wires going.”
The Chambers EL&P Company followed this up by lowering their wires at the crossings to within three feet of the town's proposed wires. The result would be to force the town to go above the Chambers EL&P Company's wire.
I find that the action of the Chambers EL&P Company in this regard is taken solely for the purpose of obstructing the town in the construction of its plant.
I construe the passage of the letter which I have quoted as a threat and the action of the Chambers EL&P Company shews that it was not an idle one. The president of the Chambers EL&P Company said to Mr. Harvey Doane, the gentleman employed by the town to put in its plant: “What is the use of you trying to put up your system? I can put my wires down and you will have to go above and that is expensive work.”
This is suggestive as to the intent of the Chambers EL&P Company in lowering its wires. I do not think it was done for the better prosecution of its business, but solely to obstruct the town and if possible to kill the town project, and I find this to be an arbitrary and unreasonable exercise by the Chambers EL&P Company of its corporate powers.
This state of facts raises the question of law, can the Chambers EL&P Company exercies its powers in anarbitrary and unrteasonable way, or must the powers of the Chambers EL&P Company be exercised in a reasonable way?
I am of the opinion that the Chambers EL&P Company cannot exercise its powers in an arbitrary and unreasonable way and I therefore grant the relief asked for by the town in respect of the lowering of the Chambers EL&P Company's wires at the place mentioned in the evidence.
The Chambers EL&P Company of course has the right to maintain its poles and wires as they were before the town project was undertaken. All I am holding on this point is that it has not the right to unreasonably and unnecessarily alter them for the sole purpose of defeating the town's undertaking.
It was contended for the Chambers EL&P Company that the proposed project of an electric light plant being constructed by the town was illegal for reasons set out in paragraph 14 of the defence.
I decide against this contention. The town has express power under the Towns Incorporation Act to light the streets and I do not know why it should not do so by electricity, there being no exclusive charter in the way.
As to other grounds of illegality all that it is necessary for me to say is that in my opinion the Chambers EL&P Company cannot urge them as a defence to this action.
By section 7 of chapter 130 of the Acts of 1889 the powers of the Chambers EL&P Company are made: “Subject to the supervision and direction of such person
as the said town or county (as the case may be) may appoint to supervise the same, whose duty it shall be to see that the said powers hereby confirmed or granted are carried out, and that any obstructions on the street calculated to interfere with the efficient working of the company's lines, or to cause any damage to life or property, directly or indirectly, are removed by the company with as little detriment and inconvenience as possible to the citizens of Truro or county or their property.”
I hold that proviso applies to section six as well as to section seven, and the plaintiffs are entitled to a declaration accordingly. Of course the supervision and direction must be fair and reasonable, and any attempt to unduly interfere with the rights which the defendant company have under their charter would be restrained.
The defendant company have the right under sections six and seven to erect poles on and break the soil of the streets subject to the supervision and direction which I have referred to.
By chapter 21 of the Acts of 1911, which is an Act amending the Towns Incorporation Act, it is provided that: “No person shall break up the soil of any street or erect or place in any street, sidewalk, road, lane, park or square within the town any telegraph, telephone, electric light or other pole or poles without first making application to the street committee in writing specifying the purpose for which such breaking up is required and obtaining their permission therefor in writing, and the committee may inpose such terms upon the person applying as the security of the public appears to them to require.”
As of 20 January 1910, the electricity rate charged by Chambers Electric Light and Power Company was "44¢ per month in April, May, June, July, August, and September, and 66¢ per month in October, November, December, January, February, and March, for each lamp wired, up to and including 16 candlepower lamps; where larger lamps are used, more in proportion".
This DC (direct current) service was not metered. That is, each residential customer paid the company a flat rate of so many cents per month for each lamp socket in the house, regardless of how much or how little each lamp was turned on.
In 1910, the company supplied electric power only at night; the system was shut down during the day. The two main uses of electric power in 1910 were for electric traction (street railways) and for lighting — Truro did not have an electric railway and the lighting was needed only at night.
From the Morning Chronicle
Halifax, Nova Scotia
10 January 1914
Continuous Lighting Service
for the People of Truro
Board of Commissioners of Public Utilities Decide
That There is a Demand for it
Tariff Rates Fixed and Rules
Defined Governing the Supply of Electric Current by
the Chambers Electric Light and Power Company
The Nova Scotia Board of Commissioners of Public Utilities filed the following decision yesterday in the matter of the application of the Chambers Electric Light and Power Company Limited, Truro, for an amendment to the schedule of rates for electric current.
This matter comes before the Board on the filing by the above named Company of a new or amended schedule of rates for electric current. The proposed rating is designed to furnish a substantial increase of revenue, claimed to be rendered necessary by reason of the increased cost of production, which increase is mainly attributable to the higher price of coal, which has now to be paid. the Company has been operating under a tariff [rate schedule] prescribed by the Board in 1910, which it appears has resulted in an increased consumption of electric current, without a corresponding increase of revenue. At the time this tariff was established by the Board, it was confessedly experimental, and the parties interested were to be at liberty after fair trial to apply for a reconsideration of the rating. On the filing of the present proposed tariff of the Chambers Company, the Board felt that an opportunity should be given to the citizens of Truro to be heard, and accordingly the coming into force of the tariff was suspended, and public notice given of the change proposed.
Interest in Matter
Pursuant to that notice, hearings took place in Truro extending over a number of days, and evidence representing 400 to 500 typewritten pages, accompanied by voluminous exhibits was given. Considerable interest in the matter was evidenced by the citizens of the town, who appeared in opposition to the change, personally and by counsel. Of the latter, C.J. Burchell, K.C., and J.L. Ralston appeared for the Board of Trade and citizens, J.P. Dill for the Dentists of Truro, who are light and power users, while S.D. McLellan, K.C., represented the Company.
The Chambers Electric Light and Power Company was one of the pioneers in electric lighting in this Province. That branch of work began as an adjunct to the woodworking business of Chambers and Layton. Early in 1887, the present Company was formed under letters patent [Act of Incorporation passed by the Nova Scotia Legislature] and took over the electrical business. Later in the same year, under special legislation, it absorbed the Truro Electric Company, a rival concern, which had been established in the same town for the purpose of furnishing electric current, chiefly for arc lighting.
The present Chambers Electric Light and Power Company at one time conducted a coal business, later, and to some extent at least up to the date of the hearing, a furniture store, laundry business, and garage. The system of bookkeeping pursued was not such as to [---] the Board reliable information as to capital investment, operating expenses, profits or losses, respectively chargeable to these different businesses.
The Authorized Capital
The authorized Capital of the Company at first, $50,000, was subsequently increased to $80,000, and in 1904 to $100,000, at which it now stands. This has been issued as fully paid shares, of which 98 per cent is in the hands of the President and General Manager. Part of this was subscribed and paid for at par, some as dividends, and other shares were purchased at from 50 to 100 cents on the dollar. It will be seen it is practically a one man concern. A bond issue of $25,000 was also made, and at the present time $12,000 of that amount is still outstanding. The reduction in bonded debt has been made out of an amount annually of late, charged to amortization. It appears impossible to say how the shares representing this capitalization were disposed of, or what proportion chargeable to capital account. A considerable amount was in the nature of stock dividends. One thing is clear, that after the first issue of $37,600 no more stock was sold for money, and even proceeds of the bond issue were applied to pay dividends.
The Financial Matter
The Board has not been furnished with very full information as to the early financial history of the undertaking, but it appears to have been profitable. In 1891 and 1892 stock dividends of 15 and 10 per cent, respectively, were declared, and in 1893 a regular stock dividend of 8 per cent was declared and paid on the increased capital and considerable outlay made from earnings on plant account. In 1904, a dividend of 20 per cent appears to have been declared and paid and thereafter the dividends ranged from 6 to 9 per cent, and the earnings, according to Profit and Loss Account from $3,183 in 1908 to $13,773 in 1909. Had a proper depreciation account been kept, the apparent earnings would not have been so large and there is good reason to suppose that the capitalization would never have reached the $100,000 at which it is now fixed. It was argued on behalf of the Company that the Legislature, having confirmed this capitalization, that earnings on $100,000 should be permitted by the Board. It is perhaps a sufficient, although not the only answer to that argument to point out that a portion only of the nominal capital is employed in the electrical business while another and unascertained portion has gone into the laundry and other branches of the Company's endeavors.
Before the hearing, the Company was instructed to file an inventory and valuation verified by affidavit of its physical assets. The inventory filed totals $84,303.33, but the
[---] when giving evidence orally stated that the values are simply estimates of what it would cost to replace the existing plant now, at present day prices. Early in the hearing it became apparent that the valuation could not be accepted as a reliable basis for rate-making purposes. While accurate evidence of the original costs, as well as the cost of production, is desirable and helpful in estimating the investment necessary to render service, they cannot be accepted as conclusive. The Board considers that the present market value of the plant as a going concern is the ultimate practical basis for determining the value of the investment upon which to fix the rate, which will produce a fair return, and believes that such is in accordance with sound practice. With this in mind, the Board felt that no satisfactory determination of the questions involved could be made without an appraisal of plant at present market values.
Accordingly an order was passed, directing such appraisal under supervision of Commissioner Colpitt. The making of this inquiry required long and patient investigation rendering speedy decision of the question quite impossible. Every pole, every yard of wire was enumerated, tested and measured; each separate piece of machinery was examined and appraised, and a reasonable amount written off of each, dependent upon age and condition, in accordance with the rules elsewhere adopted by Public Service Commissions. Not a few pieces of machinery still working were found to have exceeded the span of life ordinarily allotted.
In such cases, the rule adopted by the Wisconsin Commission was followed, and a valuation of 25 per cent allowed instead of the lower scrap value. When complete, the present value of physical assets was found to total the sum of $42,418.30. It may be pointed out that this amount exceeds by $7,718.30, the value for assessment purposes ($34,700) claimed by the Company and the President in his evidence before the assessment appeal court. It is a well recognized principle for which authority need not be cited that a valuation for purposes of taxation differs widely from a valuation for rate making and the apparent discrepancy here is not such as to call for further comment.
The Assessment Act makes the probable auction price the standard of value. In any case the valuation for assessment was probably and necessarily the result of a more or less hasty appraisal, while the present valuation dealt with each item separately. There remains to consider those intangible assets, which have given rise to so much discussion.
Under overhead charges are ordinarily classed the expenses for Engineering and Superintendence, Contingencies, Contractors' Profit, interest during construction, legal and general expense including taxes, insurance and organization, promotion, bond discount, working capital, piecemeal construction, etc.
A recent work dealing with matters of this kind, Whitten on Valuation (240), says that a Company, in most cases, should be able to substantiate its claim for overhead allowances by actual vouchers and other records. None such have been furnished here, nor indeed have overhead charges been presented directly, but that is not conclusive, and the Board feels that the Company is entitled to have its claims considered.
In the present instance the circumstances are somewhat unusual. As already stated, Mr. S.G. (Sylvester Graham) Chambers at the present time holds 98 per cent of the shares, and throughout this history of the concern has had a controlling interest. He was his own engineer, and no outside engineering skill was procured, either in designing plant or in operating the business side after it was once established. He was not a trained electrician at the commencement, but being a man of more than ordinary intelligence, and mechanical genius, has apparently acquired very full knowledge of the electric light business. His salary has been paid out of the profits of the business, and it becomes a question how far the Board should go in allowing an item for engineering to be charged to the capital investment, when that engineering has already been paid by the consumers out of profits from rates imposed.
In the case of the City of Ripon v. Ripon Light & Water Co., 5 Wisconsin R.C.R. 1-13, the Wisconsin Commission, speaking of small plants such as this, says: "The services of engineers are seldom engaged in such instances, these duties being performed by the general officers of the Company, whose entire salaries are included in operating expenses. Every progressive utility is constantly called upon to make additions. The determination of these changes is within the legitimate scope of the general officers' duties so that an allowance of 5 per cent on the total value can be regarded in no other light than that of liberality." In the opinion of the Board, this is not a case where more than a small percentage should be added to capitalization under this head.
No claim has been put forward of any expense in procuring capital. Mr. Chambers, in addition to his engineering duties appears to have financed the Company throughout, by procuring capital from relatives and others. The services of brokers were not obtained, and thus, that very common outlay was saved by the Company. He had means of his own, his credit was good, and he was able to procure capital without discounts or commission. The question then is, whether a public utility, which by reason of good credit, or for other reasons is able to procure capital without expense, is to be placed in a less favorable position as regards capitalization than a concern of dubious credit, or which pays large brokerage and underwriting charges. This was the point upon which, in England, the Commission in the case of Postmaster General and National Telephone Co., (29 T.L.R. 1900) divided.
The majority of the Commission, Lawrence J. and Mr. Gathorne Hardy, agreeing that the expense of procuring capital should be allowed, while Sir James Woodhouse, dissenting, suggested that if that were done, "The value of the thing would differ according to the financial standing of the person who constructed." It is manifest that the value of the plant is neither enhanced nor diminished by reason of the capital being procured without discounts.
Favors Reasonable Amount
This Board feels that the weight of authority favors allowing a reasonable amount, under the heading "Procuring the Capital." The amount must be reasonable; extravagant expenditure should not be sanctioned under this head, any more than in any other item of expense. The discounts which have to be paid are usually measured by the risk to capital, and therein apparently lies the key to the position. It is not necessarily the discounts and commissions which are to be allowed, but a compensation or inducement to capital to leave safe investment and take the risk incidental to a new and untried venture. If such be the correct view, the Chambers Electric Light and Power Company would be entitled to the same consideration as a Company pursuing more modern methods, and floating its stock and bonds through brokers, except that Mr. Chambers, being at the time under salary, would not be entitled to Commission. The Board feels justified in making [awarding] capital the compensation which it can usually exact, and adding a reasonable percentage to the ascertained value of the physical assets.
No Value on Franchise
Little information has been given as to the other items usually classed as overhead charges. A certain amount should be allowed for legal and legislative expenses, but it is necessary to deal with the other items seriatim, or to declare a percentage for each. After careful consideration given to the whole matter, an addition of 17 per cent to the value of physical assets appears to be a just and equitable proportion to add in lieu of intangible assets and overhead charges. In so doing, it is perhaps unnecessary to state that no value has been placed upon the franchise, as it is not the policy of the law in cases of this kind to sanction earning [---] any supposed franchise. The purpose of the percentage mentioned is to make [-------] with the supply of electrical energy to the Town of Truro.
Tariff of Rates
Having fixed the amount of capital investment upon which the Company is entitled to earnings, it remains to consider what those earnings should be. A tariff of rates should produce a revenue sufficient to meet operating expenses, depreciation, and interest on capital commensurate with the investment. Where the operating expenses are unnecessarily large, it must be apparent that an increased burden is imposed by the Utility upon the consumer.
Where the service rendered is inferior, the consumer again suffers. The only possible control which can be exercised over the Utility in such cases is through the tariff of rates; a lowered tariff should be the spur to greater efficiency and greater economy. On the other hand, a utility which affords the highest grade of service and is economical in management should receive recognition of its efficiency in a higher return.
In the present case, complaints have been strongly pressed against the Chambers Electric Light and Power Company, that it does not reach the standard it should, either in economy of management or in efficiency of service.
Under the former head, [---] the electrical business is bearing an undue proportion of the expense of the laundry and garage, particularly the former; the electric current etc. are being furnished free to employees, that the plant is defective in design and expensive in operation.
The complaint as to deficiency in service is chiefly as to arbitrary interruptions, in what should be continuous service, undue variations in voltage, and irregularity in rendering bills, making uncertain the date discounts are available.
In considering these questions, it may be convenient to refer to the following statement of expenses and revenue for 1912, and estimate for 1913, which have been furnished by the Company.
Chambers Electric Light and Power Company
STATEMENT FOR 1912
Total revenue for 1912 . . . . . . . . . . . . . . . . . . $31,954.17
Less Bad Debts, say . . . . . . . . . . . . . . . . . . 500.00
Charge to Laundry for stable, repairs, power, etc. . . . . . 1,100.00
Rent of shop, tools, current for autos, 1912 . . . . . . 150.00
S. G. C. for men at odd times . . . . . . . . . . . . . . 60.00
Wages . . . . . . . . . . . . . . . . . . $6,040.00
Coal, 2240 tons at $2.10 . . . . $4,704.00
Coal, 958 tons at $2.35 . . . . 2,251.30 6,955.30
Repairs . . . . . . . . . . . . . . . . . . 3,526.36
Freight and truckage . . . . . . . . . . . . . 50.60
Oil waste and packing . . . . . . . . . . . . . 226.21
Stable expenses . . . . . . . . . . . . . 698.21
Office, adv. and travelling expenses . . . . . 277.68
Meters and inspection . . . . . . . . . . . . . 1,205.58
Legal . . . . . . . . . . . . . . . . . . 172.03
Insurance . . . . . . . . . . . . . . . . . . 358.63
Taxes . . . . . . . . . . . . . . . . . . 763.56
Pump . . . . . . . . . . . . . . . . . . 124.00
Water . . . . . . . . . . . . . . . . . . 400.00
S. G. Chambers salary . . . . . . . . . . . . . 2,500.00
Amortization . . . . . . . . . . . . . . . . . . 3,000.00
Chambers Electric Light and Power Company
ESTIMATED FOR 1913
Commercial Revenue . . . . . . . . . . . . . $25,500.00
Street lighting and fire alarm . . . . . . . . 4,210.00
Ashes . . . . . . . . . . . . . . . . . . 100.00
Increase in commercial revenue by new rate . . 1,475.00
Less Bad Debts 1½ per cent on $25,500 . . . . 382.00
Wages . . . . . . . . . . . . . . . . . . $6,000.00
2240 tons at $2.10 $4,704.00
958 tons at $2.35 2,251.30
Plus 256 tons 8 p.c. (on acct of poor quality)
Less 320 tons (estimated required for laundry)
3134 tons at $2.70 (probable price) . . . . 8,461.80
Repairs and renewals. . . . . . . . . . . . . . . 4,000.00
Oil waste and packing . . . . . . . . . . . . . 230.00
Stable expenses . . . . . . . . . . . . . 400.00
Office, travel expense, printing, etc. . . . . 150.00
Meters and inspection . . . . . . . . . . . . . 500.00
Legal . . . . . . . . . . . . . . . . . . 200.00
Insurance . . . . . . . . . . . . . . . . . . 400.00
Taxes, Town 600, Govt. 100, P.U. 100 . . . . 800.00
Water . . . . . . . . . . . . . . . . . . 400.00
S. G. Chambers salary . . . . . . . . . . . . . 2,500.00
Since the hearing it has been somewhat informally brought to the notice of the Board that for the future the Company is likely to be deprived of the lighting of streets and civic buildings. As the correctness of this statement can if desired be challenged when an order pursuant to this memorandum is taken, it will probably be in the interest of all concerned to base any estimate upon the assumption of the loss of profit arising from former contracts with the town and this will be done.
The Estimate for 1913
It may be noted that the estimate for 1913 under the proposed tariff shows an increase of $1475 in revenue as a result of the new rate and leaves a balance of $6861.20 as net earnings. Without the increase the balance would be $5386,20. A further deduction must still be made for loss of prospective profits from street lighting.
On the expense side of the estimate several items require consideration: The first of $6000 for wages to which may be added the last $2500 manager's salary, making a total of $8500, appear to the Board quite in excess of what may be considered reasonable for a plant of this class. In the early history of the Company, the manager's salary was $750 [per year], then $1500, then $2000, and it was not until after the capital stock was fixed at $100,000 that the higher priced management of $2500 per annum began. We shall have occasion later on to refer to this in another connection.
Compensation for Employees
It may be convenient here to say, however, that the present method of supplying electricity and house heating free to the manager and employees in unascertained quantities is contrary to the provisions of the Public Utilities Act and should be discontinued. It encourages waste at the expense of the general consumer; it renders impossible the ascertainment of exact results and permits of the discrimination which the Act prohibits. The compensation to faithful employees may well be liberal, but it should be definite and a fair equivalent for services rendered.
The item of "Repairs and Renewals $4000" is also in excess of what may reasonably be anticipated or what the experience of this plant teaches is necessary. If intended to provide in this item not only for what is properly classed as renewals and repairs but for depreciation as well, the amount in the opinion of the Board is below what may be considered necessary, and allowance will be made therefor.
Cost of Coal
Much greater difficulty is felt in dealing with the item of $8461.80 for coal which is the price based on an estimated consumption of 3134 tons [for the year 1913]. A statement filed on behalf of the Company covering a period of three months indicates a coal consumption of 16.2 lbs. and for a later similar period 18.88 lbs. of coal per k. w. h. This is very far from what might be expected in a plant of this size and type. It is, of course, too much to expect here the efficiency that is obtained in some of the larger plants but the range from 4 lbs. per k. w. h. shown elsewhere in the Province by some of the larger electric companies to the 16 or 18 lbs. of the Chambers Company is much too great. After making all reasonable allowances for the defects of plant, its unevenness of load, and the inferior grade of coal, an allowance of 12 lbs. of coal per k. w. h. would seem liberal.
Applying the evaporation test a comparison with other plants is much more favorable to this Company. According to Mr. Chambers own showing, they get from 7.8 to 8.2 lbs. of water evaporated per lb. of best steam coal, and 6.1 lbs. from the lower grade coal the Company has been using. The most claimed on a large and economical plant is some 9.5 lbs. and upwards. Using a modern engine such consumption should give a result of 3.5 lbs. of coal per k. w. h., or with the evaporation of 6.1 from the lower grade coal should give a consumption of less than 6 lbs. per k. w. h. From these figures it is apparent that excessive consumption of coal as compared with k. w. h. is not due to boilers which are modern and efficient.
It may not be easy to point the finger to the exact spot where the leakage occurs. This is a duty of the management. In the light of the evidence produced a very strong inference may be drawn that much of it may be accounted for by the unmetered supply of steam and heat to the laundry, part in heat furnished to employees, and a further considerable portion to the small units [engines?] employed, which are not economical, and part to the faulty distribution system to which reference shall presently be made.
A statement furnished by the Company estimates at $1100 the amount fairly chargeable to the laundry. It is admittedly only an estimate, and a rough one made up as follows:
Keep of two horses, etc. . . . . . . . . . $220.00
10 months power, etc. . . . $700.00
2 months power, etc. . . . $180.00 880.00
Revenue of Laundry
It may well be doubted whether the first of these items is not an under estimate, and in as much as the facts to establish it are peculiarly within the knowledge and under the control of the Company it might not be unfair to raise every presumption against it, but as the probably discrepancy is not large the item may be permitted to pass. Greater difficulty is felt in determining the accuracy of the second item. That it is an under estimate seems certain. How great is the discrepancy cannot be stated with any degree of confidence, but the material produced must be dealt with. The item of $880.00 includes water delivered hot at the laundry, steam heating, electric light and power. In his cross examination Mr. Chambers stated that one-fourth of the steam, and one-fourth of the water was probably consumed by the laundry.
In re-examination the former estimate as to steam was corrected or rather withdrawn, but the estimate of water remains. The revenue from laundry bears nearly the same proportion to the revenue from the electric light business. For the future the laundry must be treated as any other customer, its electric current consumption, steam consumption, and water metered, and must pay for it at regular rates. In the meantime the Board while recognizing the insufficiency of the data, feels that it would not err on the wrong side in adding 40 per cent to the amount under consideration. By so doing, the amount would become $1232, and the total $1452.
Reference has already been made to the Salary of Manager charged to the electrical branch of the business, no very definite account of the services performed has been given. No good reason appears why the laundry, furniture and garage business should not bear a portion of that item. Mr. Chambers is the unquestioned head of all four branches. It is true that he testifies that the laundry foreman now attends to everything. Elsewhere, however, he stated that the men employed about the electric light station know as much about electricity as he. While the Board does not take this statement literally, it cannot doubt that if the positions were reversed, if the laundry were a public utility and the electric lighting a private business, the foreman would be required to bear a share of the manager's salary. Under all the circumstances the Board is of the opinion that an allowance of $1800 per annum for the management of electrical plant suited to the requirements of Truro errs if at all on the side of liberality.
Moreover, high priced management can only be justified by the results obtained. We have already referred to what appears excessive coal consumption. Complaint is also made of the lack of constancy in voltage.
Perhaps this was the complaint most strongly pressed at the hearing. As it was argued on behalf of the Company that the Federal Parliament having fixed the range permissible, this Board could not deal with the matter, it seems proper to state that the Board does not abrogate to itself any authority inconsistent with the Dominion statute, but believes it has a duty to enforce compliance with that statute as a matter of reasonable service. Section 92 of the Public Utilities Act would appear to remove any doubt which might otherwise exist. It cannot be said that electric current showing a drop of 10 or a range of 20 per cent can be considered either reasonable service or a compliance with the statute. The evidence given the Dominion inspector has not been overlooked but no similar notification appears at any time to have been given to consumers. Evidence before us shows that in the course of a few months voltages ranged from 112 to 143, a state of things which is quite inconsistent with efficient service.
Mr. Chambers in the course of his evidence testifies to voltage confined to a less variation than just stated as shown by station instruments. These readings were taken at a point on the main line at Inglis Street, and would be reliable as giving the drop at that point. Difficulty in accepting this as a test of the whole system arises from the fact that feeding lines taken off the system between the station and the point referred to are subject to all the variations which are due to line loss and which the station instruments would not disclose.
Increase in Amperage
It may not be amiss here to refer to the practice of — based upon the exceedingly fallacious contention that there is economy in — using lamps on a voltage higher than their rating. It might fairly be assumed that the lamp makers would claim the highest possible efficiency for their product and such is undoubtedly the case. It is perfectly true that a current higher than the rating of the lamp will increase the return of light in greater ratio than the increase in amperage. The apparent gain thus made is discounted many times by the fact that the life of the lamp is shortened. Moreover, when over-run, the glass blackens and this absorbs much of the light produced. Electric light users who have to pay for current as well as lamps will find economy in avoiding voltage either below or above the rating of the lamps and therein lies reason for the statutory restriction.
Fluctuations in Voltage
While it is recognized that fluctuations in voltage are unavoidable, particularly in a plant of the description under consideration, the Board feels that much might be done to improve matters. With the alternating current the voltage is steadied and in the opinion of the Board a system of that kind is best adapted to the existing conditions in Truro. Such a plant would be less expensive in operation, and the transmission losses would be greatly reduced.
The present plant situated near one end of the area served results in an unduly large line loss and unsteadiness in voltage, which has already been referred to. With the adoption of the alternating system the station might be located on the outskirts of the town without appreciable line loss. It might secure a railway siding with resulting reduction in cost of coal delivery. It would probably have been to the advantage of all concerned had the plant been remodelled on those lines years ago.
With the adoption of a smaller number of larger units increased efficiency would be obtained. The present excessive charges for fuel, wages, salaries and repairs have already been referred to. If they cannot be reduced because of the type of plant, which to some extent seems probable, the Board may feel itself compelled to direct the installation of a new system along the lines indicated.
As at former hearings the arbitrary interruption in service is complained of. The Board is of the opinion that there is a public demand for continuous service and that there is evidence of sufficient demand to warrant it, and that no undue burden will thereby be imposed upon the Company.
It is with some hesitation that service during Sundays and holidays is ordered, and in order to enable the Board to judge the result of the experiment the Company will be required to keep a record for three months and send to the Board a report verified by affidavits of the Sunday and holiday load. With the assurance of continuous service an increased daylight demand may be expected, and citizens desiring that continuous service have it to some extent in their own hands to justify the present finding. Unless the present demand continues and perhaps increases it may prove unfair to the Company and to the users of light alike. An interruption of service for a short time after noon or from 12:15 to 12:45 p.m. each day may be permitted.
While not approving of the new tariff of rates for motors the Board feels that the old tariff is faulty and will endeavor to prepare to meet the objections raised and at the same time consistent with the earlier finding as to value. It would appear to the Board in the light of knowledge acquired under the present investigations, that the present minimum of $3.00 is too high and that the tariff generally may be recast with advantage. Motors of low rating may be served through the light meter paying for current at the lighting rate without any special minimum. Larger motors which may impose a heavy and unexpected load on the plant should pay a minimum proportioned to the load. The Board is fully alive to the imperfections of the proposed schedule and hopes that a more equitable scheme may ultimately be worked out applicable generally to electrical plants in the Province.
The 1910 Tariff
When in 1910 a tariff was prescribed by the Board for the Chambers Electric Light and Power Company no independent valuation having been made, the estimate of the Company subject to some obvious discrepancies, was for the time accepted as prima facie correct. Consequently a return was permitted upon an amount much larger than the recent valuation shows to have been proper. The tariff then prescribed was designed to encourage an increased consumption and at the same time allay if possible friction which had arisen chiefly over a somewhat onerous system of socket charges. The first object was to some extent accomplished although not so fully as it is believed would have been the case had the Company more cordially accepted that finding.
This having been the first public utility brought under the new system of regulation it was not perhaps surprising that some restlessness under such control should have been manifested in an attempt to evade the rules imposed and to substitute an interpretation in conformity with opinions previously formed. It may be a little difficult for the management of old companies to adapt themselves to the new conditions. The present conception of a public utility is no longer that of a private enterprise which may place on the business the burden of all the profits it will bear but which must face the regulation of competition. Under protection from competition the public utility has been likened to a trust for the public.
An Adequate Service
There is mutuality of obligation and that the utility is to furnish service adequate, reasonable and just, and it is the duty of this Board to enforce that obligation and at the same time to assure to the enterprise an adequate return upon the capital invested... (Continued on page four)
Chambers Electric Light & Power Company was incorporated by letters patent dated 9 February 1889.
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