section 6, township 43 north, range 11 west, Douglas County, in accordance with the provisions of chapter 31 of the Statutes, came on to be heard pursuant to due and statutory notice at the offices of the commission in the city of Madison on March 7, 1939 before Adolph Kanneberg, examiner.

Appearances:

Dahlberg Light and Power Company by

F. S. Dahlberg, secretary and treasurer.
Of the commission staff

K. C. MacLeish, senior assistant water, gas, and
utilities engineer.

The dam was constructed pursuant to a permit issued by the commission June 14, 1932 in docket 2-WP-49 (2 P.S.C.W. 578). Construction of the dam was begun in 1932 and completed in 1933. The permit authorizes the applicant to maintain the maximum pond level at the dam at elevation 107.20 feet, applicant's datum. The tailwater was at elevation 89.17 feet. It was the intention of the applicant to obtain an operating head of approximately 18 feet. However, the original plans were changed and the dam was constructed so as to enable the applicant in the future to raise the normal pond elevation to approximately 110.20 feet. After the completion of the dam the tailwater was also lowered about 2 feet. The dikes have been raised since the original construction. The completed project is now capable of developing a head of approximately 23 feet. The cost of the additional flowage lands required for the raised and enlarged dam was the sum of $100.

The applicant now requests authority to so operate its dam in the Eau Claire River as to maintain a normal headwater elevation at 110.24 feet, Public Service Commission datum, and obtain an operating head of approximately 23 feet above the present tailwater elevation at 87.17 feet. As already stated the tailwater before dredging was at elevation 89.17 feet.

On July 7, 1933 the commission surveyed the dam after the completion of the concrete work and established bench marks pursuant to authority granted to it by section 31.02, Statutes, and noted that the plans as originally filed were not followed. Using the generator room doorsill as elevation

100.77 feet which is both Public Service Commission datum and applicant's datum, the following elevations were obtained:

Tailwater...

Headwater...

Elevation 89.07 feet

106.35 feet

Public Service Commission bench mark No. 759-A.... 102.06 feet
Crest of spillway...

Concrete walkway over spillway..

104.9 feet
112.66 feet

Bench mark 759-A is a bronze tablet marked Railroad Commission of Wisconsin set in a 6-foot concrete post flush with the surface of the ground. It is located 65.8 feet southwest of the southwest corner and 77.2 feet southwest of the southeast corner of the power house and 6.7 feet east of the concrete transfer block. Elevation when referred to datum of generator room doorsill as 100.77 feet is 102.06 feet.

Bench mark 759-B is a square cut in top of left upstream abutment of dam. Elevation when referred to datum of bench mark 759-A is 112.61 feet.

New plans have been submitted using the Public Service Commission elevations. The plans are hereby approved.

FINDINGS

NOW, THEREFORE, Upon the application and upon the evidence, the records, files, and proceedings herein the commission makes the following findings:

1. That the application complies with the requirements of chapter 31 of the Statutes;

2. That upon receipt of the application herein the commission fixed the time and place for a public hearing thereon; that due notice of such time and place for hearing was given to the applicant; and that the applicant caused a notice of such time and place for hearing to be published once each week for 3 successive weeks in the Evening Telegram, a daily newspaper designated by the commission and published in the city of Superior, Douglas County, within which county are situated all of the lands which will be affected by the raising and enlarging of the dam, and that not less than 20 days prior to the hearing the applicant mailed to each and every person interested in any lands that will be affected by said dam and whose post office address could by due diligence be ascertained a notice of the time and place set for said hearing, which notice was accompanied by a general statement of the nature of the application and was forwarded to each such person by registered mail in a sealed and postpaid envelope properly addressed, and that proof

of such notice and mailing was filed with the commission at the time of said hearing;

3. That thereafter said hearing was duly held in accordance with said notice and the commission did take evidence offered by the applicant in support of the application, and that all persons in interest were given an opportunity to be heard;

4. That the raising, or enlarging, of said dam, as proposed by the applicant and the operation thereof as so raised and enlarged will not materially obstruct existing navigation nor violate other public rights and will not endanger life, health nor property.

AND HEREBY THERE DOES ISSUE AND IS GRANTED to the applicant, the Dahlberg Light and Power Company, the permit provided for by chapter 31 of the Statutes for the raising, enlarging, and operation of said dam in the Eau Claire River in the southeast quarter of the northeast quarter of section 6, township 43 north, range 11 west, Douglas County, as above described.

[2-U-1434]

Application of the Strum Telephone Company for Authority to Increase Rates

Decided March 30, 1939

APPLICATION of Strum Telephone Company for authority to increase rates, granted, the commission finding that the utility's existing rates as applied to metallic service, are unreasonable and insufficient. Order sets forth the revised schedule authorized which also includes a move charge and a rate for extension telephones.

ORDER APPROVING INCREASE IN RATES

The application of the Strum Telephone Company for authority to increase its rates for telephone service was filed with the commission on February 4, 1939. Notice of investigation and assessment of costs on the application was issued February 16, 1939.

Hearing was held at Eau Claire on March 8, 1939 before Examiner Beatrice Lampert.

Appearances:

Strum Telephone Company by

Olaf Indgjer, secretary and manager, Strum, Wis-
consin.

John J. Johnson, president, Strum, Wisconsin.
Of the commission staff

Kenneth J. Jackson, senior case investigator.

OPINION

At the present time this company has the following rates on file with the commission:

The company desires to apply a 25-cent increase to each of the rates quoted above. The evidence presented at the hearing indicates that the company does not desire to apply this increase to all subscribers immediately but only to those receiving service on metallic circuits. There are only 80 subscribers, of a total of 239, now receiving metallic service, but the company expects to metallicize all lines by the close of 1940. Service on the company's grounded lines is unsatisfactory because of the construction of electric lines in the vicinity.

Following is a comparison of operating income in 1937 and 1938:

Evidence presented at the hearing indicates that 1937 operating expenses are more nearly normal than those reported in 1938 because a large amount of metallicizing was done during the latter year. Although a large part of the expense incurred in carrying out this program was capitalized, some of the costs of the work were probably classified as ordinary maintenance. For this reason it is believed that the records for 1937 should be used as a basis for estimating normal operating expenses.

One important change, however, has taken place since 1937 and should be considered. The company's witness testified that the contract for line work and central office operation, which was formerly $90 per month, has of necessity been increased to $115. This increase amounts to $300 per year. Consideration should also be given to the fact that line maintenance may be expected to increase as additional lines are metallicized. It appears that $2,700 is a reasonable estimate of normal operating expenses, excluding uncollectibles, depreciation, and taxes.

The company has charged 6 percent for depreciation expense in 1936 and 1937. This appears to be excessive. If 3.5 percent of the book value of property at the close of 1938 were used, the charge would be $294.

An allowance of 1 percent of annual revenues should be adequate for uncollectibles, giving consideration to the amounts charged off over a period of time.

The gross receipts tax paid by the company will increase approximately $6 if the rate increase is granted. Income taxes would increase $35 on the basis of our estimates of operating revenues and expenses under the proposed rates. Adding these figures to taxes charged in 1937 we arrive at an estimate of $186 for total taxes under the proposed rates.

On the basis of these estimates, total estimated deductions before making any provision for return on investment are $3,212. Estimated revenues under the proposed rates without allowing for further metallicizing of lines are $3,452. These estimates indicate that $240 would be available for return on present investment if the rate increase is granted.

The book value of plant ($8,409) and also the depreciation reserve ($2,038) as reported by the company are the only available data on the value of the property. Materials