For the prosecutors, Ward Kremer.
For Monmouth Consolidated Water Co., Autenrieth & Wortendyke (Joseph F. Autenrieth) (C. H. Dickey, of the Iowa bar, on the brief).
Before Justices Bodine, Perskie and Porter.
[128 NJL Page 91] BODINE, J. Certiorari was allowed to review a decision of the Board of Public Utility Commissioners permitting the
Monmouth Consolidated Water Company to increase its revenues by some $86,000. The utility on November 14th, 1940, filed with the Board a schedule of increased rates effective as of January 1st, 1941. The Board suspended the proposed rate pending a hearing pursuant to N.J.S.A. 48:2-21d, and, after hearing, found the increase reasonable. The rate went into effect and the municipalities adversely affected contend that the proofs do not support the adjudication.
The utility was a consolidation of a number of small water companies serving municipalities in Monmouth County, a county bordering on the Atlantic Ocean and containing many residences used only in the summer. There are 22,000 customers served and the territory covered extends along the ocean from Fort Monmouth to Bradley Beach. Emergency connections are maintained with two municipal water plants and water is sold wholesale to two other companies. There are four pumping stations and the demand for water fluctuates seasonally. A population of 180,000 people are provided with water in the summer. In the winter there is less than half that number.
The capital structure is as follows: First Mortgage Five Per Cent Gold Bonds (whatever that term means) Series A due June 1st, 1956, $3,564,000; 1,857 $7 Cumulative preferred stock, stated value $185,000; 26,000 shares no par value common stock, stated value $2,100,000. Open account due American Water Works and Electric Company, the parent company, as of March 31st, 1941, $456,000.
The company placed the value of its used and useful property at $7,000,000, and claimed that by reason of the increased municipal, state and federal taxes it had earned but 3.3% in 1937; 3.4% in 1938; 3.8% in 1939 and 2.8% in 1940.
The Board, after carefully weighing the evidence, placed the value of the property at $5,600,000. The probable operating revenue was fixed at $620,786, a trifle less than the objectors' testimony suggested, and the probable loss from uncollected water bills at $3,000 annually. An allowance for taxes in the sum of $147,498 was made.
The following break down shows the result: