S T A T E OF G E O R G I A Carl E Sanders, Governor 91st REPORT OF GEORGIA PUBLIC SERVICE COMMISSION 2UU Washington St,, SW,, Atlanta 3, Ga* January 1, 1963 to January 1, 1964. Crairf*ord L, Pilcher, C hairman Allen Chappell, Vice Chairman Walter R* McDonald, Commissioner Ben T* Wiggins, Commissioner William H. Kimbrough, Commissioner A, 0* Randall, Secretary BOUND B Y THE N A TIO N A L LIB R A R Y BIN DERY CO. OF GA. BOUND B Y THE N A TIO N A L LIB R A R Y BIN DERY CO. OF GA. |( . I r LETTER OF TRANSMITTAL September 1, 196b To His Excellency Carl E, Sanders Governor of Georgia Dear Governor ; As provided "by law, the Georgia Public Service Commission submits herewith its 91st Annual Report of the regulatory activities of the Commission for the year ending December 31* 1963 Respectfully submitted, LETTER OF TRANSMITTAL September 1 } 1964 To His Excellency Carl E s Sanders Governor of Georgia Dear Governor ; As provided by law. the Georgia Public Service Commission submits herewith its 91st Annual Report of the regulatory activities of the Commission for the year ending December 31; 1903 Respectfully submitted., Walter R* McDonald, Commissioner William. H. Kimbrough, Commissioner Index Letter of Transmittal Introduction ------------------------- --------Public Hearings - ------------------------------Appropriation - - ---------- ------------ ------ Page 1 3 4 MOTOR CARRIER REGULATION Amendments to MotorCarrier l a w s ---------- ----9 Amendments to Motor Carrier R u l e s ---------- -Certificate Decisions -----------------------Enforcement - - - - ---------------- - Fees collected - - ----------------------- j$j* I*C,C. Joint Board Hearings - -------- - - - Litigation (Civil)---------- -- -- * -------- -- Bates-------------------------- Reciprocity ---------- ---- -------------------- 5 4 144 3 3.8 29-31 3-3 RAILROAD REGULATIONS Agency Service ----- -- ----- 3? Construction (new railroad) 38 E x p r e s s ----- ------ ---- ---- 34 Freight - - - - - - - - --- 36 Interstate Service - - - - - 4D Passenger Service ----- --- 34 W. & A. Railroad ----- -- -- 39 TRANSIT REGULATION Atlanta Transit S y s t e m ----------------------- 60 Litigation (civil) ------------------------- - 21 (index continued next page) UTILITY REGULATION General; Introduction - ------------------------- Investment Tax Credit -- --------------- Electric s Georgia Power C o m p a n y ---------Savannah Electric and Power Company----- Gas s Atlanta Chs Light Company ----------------Chattanooga Gas Co m p a n y ------Gas Light Company of Columbus-----------MLd-Georgia Gas C o m p a n y ---- -----------Municipal-- ----South Atlantic Gas C ompa n y -- -------------Litigation ( c i v i l ) ---------------------- Telephone; Certificates-- ------------------ -- - - - Loan & Security Matters-- ---------------Orders issued - ----------- - --------- - Miscellaneous - -------------------------- Telegraph Western liaion .telegraph Company Page -4445 46 47 53 59 56 58 59 57 20 & 23 49 & 51 49 47 52 63 91st ANNUAL REPORT Introduction The Annual Report of the Georgia Public Service Com mission covering the activities for the year ending December 31, 1963, is submitted herewith in compliance with law* The members and officers of the Commission are the same as shown in the last report. The present personnel and employees of the Commission are as follows Crawford L* Pilcher, Chairman Allen Chappell, Vice Chairman Walter R* McDonald, Commissioner Ben T* Wiggins, Commissioner William H* Kimbrough,Commissioner A. 0. Randall, Executive Secretary and Legal Aide Robert W* Gerson, Assistant Executive Secretary Mrs. Mae A* Montgomery, Reporter Robert B. Alford, Chief Utilities Engineer Douglas N* Smith, Senior Utilities Engineer Robert W* Hayes, Utilities Engineer (vacancy) , Junior Utilities Engineer Frank G. Heald, Senior Utilities Auditor James D* Barnett, Utilities Auditor (vacancy) , Utilities Auditor James M, Falk,Junior Utilities Auditor David 0 .Benson, Transportation Rates Expert J. Fred Parker, Senior Transportation Rates Specialist L. Thomas Doyal, Senior Transportation Rates Specialist Larry L. Carpenter, Transportation Rates Assistant Robert N, Fellows, Certificate-Insurance Supervisor Donald J. Lawrence, Director Motor Carrier Inspection and Enforcement George E* Thurmond, Civil Defense Officer* All other Commission employees are listed in alphabetical order as follows: Mrs, Carolyn Baxley, Senior Stenographer Mrs, Lucene R. Bering,S enior Stenographer Thomas L. Bryan, Principal Clerk Mrs, Paula F, Campbell, Senior Stenographer Mrs, Mbzelle Colquitt, Senior Stenographer Herbert R, Daugherty, Motor Carrier Inspector W. E.Ibolittle, Motor Carrier Inspector Mrs, Ann R, Donehoo, Senior Stenographer A, J. Fort, Motor Carrier Inspector Joan L, Holland, Senior Stenographer James H, Hooks, Motor Carrier Inspector Mrs, Linda H, Ingle, Senior Stenographer Carolyn B, Jenkins, Intermediate stenographer J, Diane Johnson, Intermediate Clerk Mrs, Virginia R, Mann, Senior Stenographer Mrs. Emily Nhrtin, :nior Stenographer Mrs. Ibris Mills, Principal Stenographer Mrs , Sarah H.McGonigal,Senior Stenographer , Mrs. Rubye D Otwell, Senior Stenographer Mrs. Patsy Porter, Senior Stenographer John R, Price, Confidential Secretary Mrs. Norma C, Ray, Receptionist Mrs. Bella A. Spaller, Intermediate clerk T. S. Tyson, Motor Carrier Inspector Bobby Edmondson, Porter-Machine Operator. During the year 1963 the following employees were added to our list, to-wit: David A, Lariscy, Utilities Auditor; James M. Falks, Junior Utilities Auditor; Mrs.Kay Stanfield, Sr, Stenographer; Judy lackey, Intermediate Clerk; Joan L. Holland, Sr. Stenographer; Carolyn B, Jenkins, Intermediate Stenographer; Mrs. Norma Ray, Reception ist; and Mrs. Bella A. Spaller, Intermediate clerk. The follow- regular employees resigned during the year: David A, lariscy, Utili ties Auditor; Martha Robinson, Senior Stenographer; Mrs. Kay Stan field, Senior Stenographer; and Mrs Marian Rountree, Receptionist. The Commission lost a valued employee in the death of Thomas L.Bryan, Principal Clerk, who died of a sudden heart attack on May 11, 1963. During the year the work of the Commission required the services of one temporary employee, to-wit: Miss Gail Browne, a student at the University of Georgia, who was employed as temporary Receptionist during the summer months, the regular Receptionist having been given a temporary leave of absence. PUBLIC HEARINGS During the year the Commission conducted 384 Public Hearings, Public Hearings commence on the second and fourth Tuesdays in each month and continue on successive days there after until all current applications and petitions have been dis posed of, So long as this record can be maintained no backlog of cases will develop. All matters docketed for public hearing are heard by the entire Commission in open session, a majority of the Commission constituting a quorum The Commission does not use Hearing Examiners, thereby avoiding unnecessary delays for the purpose of reading records. Furthermore the hearing of evidence in person enables each Commissioner to acquire a more complete picture of the matter under consideration. I. C. C. JOINT BOARD HEARINGS In addition to Commission hearings the Interstate Com merce Commission assigns applications for motor carrier certifi cates between or within three or less states before a Joint Board composed of a representative from each of the state commissions in which state the applicant proposes to operate. Although the Chairman of the Commission is the Joint Board Member, each member of the Commission is a substitute Joint Board Member and may participate in these hearings, lb has been customary to assign a member of the staff of the Commission as substitute Joint Board Member to participate in Joint Board Hearings as the as signment dates generally conflict with Commission hearings. It is important for the Commission to participate in the hearings and this participation consumes considerable time. The follow ing members of the staff are Substitute Joint Board Members: A, 0. Randall, Secretary David 0 # Benson, Rate Expert J, Fred Parker, Sr, Transportation Rate Specialist L, Thomas Doyal, Sr, Transportation Rate Specialist Robt. W, Gerson, Assistant Secretary , MOTOR CARRIER CERTIFICATS AND LICENSE FEES The Commission is charged with the responsibility of collecting and accounting for motor carrier certificate and license fees. The total certificate and license fees collected and remitted to the State Treasurer during the year 1963 are as follows: Ceritificate fees at $35*00 each, and certificate transfer fees at $7.50 e a c h ------------------- ------------------ ------$ 3,855.00 Regular license fees at $25.00 each - - - - - ---- - --- -- - 293,225.00 Reciprocal registration fees at $1.00 each - - - - - - - - - 26,542.00 TOTAL $328,622.00 In addition to the foregoing certificate and license fees of $328,622.00 collected by the Commission, the Railroads and Utilities under the jurisdiction of the Commission were subject to a tax assess ment which produced the sum of $280,000.00, which was collected by the Property and License Unit of the Department of Revenue, making a total of $608,622.00 available for appropriation to the Commission, although it should be noted that the appropriation for the Commis sion was limited in the Appropriation Act of 1963 to $460,000.00. MOTOR CARRIER CERTIFICATE DECISIONS The following is a breakdown of motor carrier certificate deci sions by count, some of which were decisions on actions not requir ing public hearing, and some of which required more than one public hearing: Applications for new certificates: Approved - - - - - --------- 105 Denied - - - - - - - - - - - - - - - - - - - - - 14 Withdrawn - - - - - - - - - - - - - - - - - - - - 11 Dismissed - - - - - - - - - - - - - - - - - - - 16 Applications for transfer of certificates: Approved - - - - - - - - - - - - - - - - - - - - - 59 Denied - - - - - - - - - - - - - - - - - - - - - - 4 Certificates amended - - Certificate amendment applications withdrawn and denied - - - - - - - - - - - - - - - - - - - - 21 Certificates cancelled - - - - - - - - - - - - - - - 46 Certificates suspended - - - - - - - - - - - - - - - Certificates reinstated - - - - - - - - - - - - - -- -- Miscellaneous, extensions, refunds,reconsiderations,etc*. Show cause orders dismissed - - - - - - - - - - - - - - 1963 63 45 183 56 In addition to the foregoing hundreds of rules nisi on insurance cancellations are issued under Commission resolution which are automatical ly dismissed on renewal filings* AMENDMENTS OF MOTOR CARRIER RULES ________ AND REGULATIONS__________ , During the year the Commission amended the following Motor Carrier Rules and Regulations; On July 17, 1963, the Commission amended Rule 2 by adding the following paragraph thereto; Class M - Contract Carriers of the following de scribed types or classifications of property, oper ating over the highways of the State of Georgia, but over no fixed route, in intrastate or intrastate and interstate commerce, under Certificates of Public Convenience and Necessity as follows; Monies, coins, currency, legal tender, precious stones, precious metals, jewelry, stocks and bonds, negotiable and non-negotiable instruments, securities, postage, revenue stamps, rare objects and other valuable documents and items* On July 17, 1963, the Commission amended Rule 5 to read as follows; (a) No motor carrier operating under certificates Classes nA n, ,,B ", nCn and nE ,! shall charge, demand, collect or receive a greater or less or different com pensation for the transportation of passengers or pro perty, or for any service rendered in connection there with, than the rates, fares and charges prescribed or approved by order of the Commission! nor shall any motor carrier unjustly discriminate against any person in its rates, fares, charges or service, but the Com mission will prescribe by general order to what persons -5- motor carriers may issue passes or free transporta tion and reduced rates for special occasions# Nor shall any such carrier refund or remit in any manner or by any device any portion of the rates, fares or charges prescribed or approved by the Commission or extend to any person, firm, co-partnership or corpor ation or other organization or association, privileges or facilities in the transportation of persons or pro perty, except such as are regularly and uniformly extended to all# (b) Motor carriers operating under Class "Elf Certi ficates shall be required to file copies of bilateral contracts executed between the carrier and the shippers named in the Certificates under which the operation is conducted, not to exceed three in number, setting forth the duration thereof, the terms and mutual obli gations thereunder. All Class ,!E n Certificates are automatically renewed at the expiration of each seven year period from the date of issuance or re-issuance thereof as provided for in paragraph (g) in Section 68-504 of the Code ofGeorgia of 1933 unless otherwise ordered by the Commission# (c) Motor carriers operating under Class Certi ficates shall be required to file copies of bilateral contracts executed between the carriers and the ship pers for whom they transport property under said cer tificates, such contracts to contain the basic terms and mutual obligations of the parties# Said motor carriers shall file with the Commission tariffs con taining maximum charges for the services rendered under said certificates and shall in no case charge more for said services than said maixmum charges. All Class "M" Certificates are automatically renewed at the expiration of each seven year period from the date of issuance or re-issuance thereof as provided for in paragraph (g) in Section 68-504 of the Code of Georgia of 1933 unless otherwise ordered by the Commission# On April 23, 1963, the Commission amended Rule 9 to read as follows: (a) All schedules of rates, fares and charges for the transportation of persons or property charged by motor carriers operating under Certificates Classes, nA n, ''S '1, nC" and t'E" shall be the rates, fares and charges approved or prescribed by the Commission. (b) All freight and passenger classification, rules, regulations and schedules, and any and all facilities, privileges or services, shall be the freight and passen ger classifications, rules, regulations, schedules, facilities, privileges or services which are approved or prescribed by the Commission. (c) Motor carriers operating under certificates Classes nA M, f,Btt, "CW and nE ,T may publish and file tariffs with the Commission thirty days in advance of the effective date thereof, effecting changes in said rates, fares, charges, classifications, rules, re gulations or schedules and such tariffs shall unless rejected by the Commission prior to the said effective date be deemed to be approved by the Commission subject to complaint and further order; provided, however, that the filing of such tariffs with the Commission shall not be construed as an approval of any of the rates, fares or charges, rules, regulations and sche dules which advance a charge or decrease a service, which change was not previously authorized by the Comr* mission. Initial tariffs, rules, schedules, etc., when filed with an application for a Certificate of Public Convenience and Necessity to begin operations shall, unless rejected, be deemed to be approved by the Commission effective as of the date that such certificate is issued* (d) All tariff publications containing rates, fares, charges, rules, regulations, etc., covering Georgia intrastate traffic shall conform in general style and make-up to the form prescribed b y the Interstate Commerce Commission. (e) Changes in rates, charges, rules, regulations, etc., shall be symbolized and such explanation thereof made in the tariff as will indicate t he character of the change. (f) All tariffs, shall bear at the top of the first or title page a G.P.S.C. number, and tariffs shall be numbered consecutively. Where any tariff cancels a previously published and filed tariff such cancella tion shall be shown immediately following the number of the tariff making such cancellation On February 6, 1963, the Commission amended Rule 16 by adding paragraph (f) to read as followsi (f) All applicants for certificates of public con venience and necessity to operate as motor common carriers in intrastate commerce who, in connection with such operations, seek:- authority under Section 206(a)(6) of the Interstate Commerce Act, as amended, to engage in interstate and foreign commerce within limits which do not exceed the scope of the intra state operations which may be authorized to be con ducted, shall also file with the Commission, in dupli cate, the notice of such intention on the form pre scribed by the Interstate Commerce Commission for publication in the Federal Register, and all such ap plications shall be assigned for hearing not less than thirty (30) days from publication in the Federal Register, and all such applicants shall make proof of such publication in the Federal Register by filing with the Commission a copy of the publication thereof* On April 23 and July 17, 1963? the Commission amended Rules 86 and 87 to read as follows; Rule 86 (a) On or before the 30th day of the month followi ng the quarter for which made, all motor carriers operating under Certificates Classes "A ", "B", "C", "E n and " M " shall file on forms prescribed by the Com mission a report of revenues and expenses for the pre ceding quarter* (b) On or before the 30th day of the month follow ing the quarter for which made, all Class "A " motor carriers of property shall file, under oath, on forms prescribed by the Commission, a report showing assets and liabilities, total amount of unpaid claims on hand for ninety (90) days subsequent to the date of filing of such claims, the total amount of C, 0* D, collections and the amount remaining unpaid together with the amount remaining unpaid beyond 10 days fol lowing delivery of the C. 0. D, and the occasion or reason therefor, the several different kinds of in surance carried and the amounts thereof. (c) The term ''quarters'* as used in this rule means the three months periods ending with March 31, June 30, September 30 and December 31 in each year* Rule 87 (a) On or before April 1st of each year, motor car riers operating under Certificates Classes "A ", nB ", "C", "E " and "M " shall file on forms prescribed by the Commission an annual report of operations for the preceding year, showing assets and liabilities, revenues and expenses of operation, and other information re quired. (b) Motor carriers operating under Certificates Classes nA n, ,!BH, ,,C ,f, ME ,f and nM n (except motor carriers of household goods) and having an annual gross revenue, f'om all sources, of $100,000,00 or more, shall keep and maintain their accounts, in con formity with the "Uniform System of Accounts for Class I Motor Carriers11 as prescribed by the Inter state Commerce Commission, and shall also keep and maintain a record showing the total number of miles operated in intercity service by all vehicles and showing separately the number of miles operated by such vehicles within the State of Georgia. On June 28, 1963, the Commission amended paragraph (a) of Rule 25 to read as follows: (a) In addition to registering and obtaining licenses for equipment as provided in this rule motor carriers, Class "Gw, operating solely in interstate commerce on or over the highways of the State of Georgia must also: (i) register with the Commission the routes over which they operate; (ii) file a copy of each certificate, permit or other authority issued to them by the Interstate Commerce Commission authorizing operations over the highways of the State of Georgia or an affidavit stating that the commodities to be transported are wexempt" from the jurisdiction of the Interstate Commerce Commission; (iii) file evidence of the requisite insurance coverage; and (iv) obtain a re gistration permit authorizing such operations prior to the inauguration thereof0 At the 1963 Session of the General Assembly the following Code Sections were amended as quoted herein below: 68-502 . . . (c) , , , . , , This chapter shall not apply to: (3) Taxicabs, drays, trucks, buses and other motor vehicles which operate within the corporate limits of municipalities and are subject to regulation by the governing authorities of such municipalities; and this exception shall apply to taxicabs and buses even though such vehicles may in the prosecution of their regular business occasionally go beyond the corporate limits of such muni cipalities, provided they do not operate to or from fixed termini outside of such limits (8) Any dump truck or transit mixer vehicle used exclusive ly in the transportation of sand, gravel, crushed stone, fill dirt, borrow pit materials, plant mix road materials, plant mix con crete, or road base materials, to be used in the construction, reconstruction, or maintenance of public highways, bridges, airport runways (including adjacent taxi strips and parking areas), or dams, when payment for such transportation is made by the United States, this State, or any county or municipality or other governmental subdivision of this State, or where pay ment is made by any contractor performing such public work under contract with any such government, and when such truck or vehicle transports such materials for a distance not exceeding fifty (50) miles* 68-510: RATES, FARES, AND CHARGES; COMMISSION TO FIX; FILING OF CONTRACTS: The Commission shall prescribe just and reasonable rates, fares, and charges for transportation by motor carriers of passengers, baggage and property, and for all services rendered by motor carriers in connection therewith, and the tariffs therefor shall be in such form, and shall be filed and published in such manner and on such notice as the Commission may prescribe, and shall be subject to change on such notice and in such manner as the Commission may prescribe. No such motor carrier shall con tract to carry at a greater or less rate than prescribed by the Commission, and all such contracts are hereby declared unlawful. Copies of all contracts of motor carriers with their patrons shall be filed with the Commission, 68-514: AGENTS FOR SERVICE ON NONRESIDENT MOTOR CAR RIERS; SERVICE OF PROCESS UPON MOTOR CARRIERS; VENUE; ENFORCE^ MENT BY COMMISSION: (a) Each nonresident motor carrier shall, before any certificate or other authority is issued to it under this Chapter or at the time of registering as required by Cede Section 68-525, designate and maintain in this State an agent or agents upon whom may be served all summonses or other lawful pro cess in any action or proceeding against such motor carrier grow ing out of its carrier operations, and service of process upon or acceptance or acknowledgment of such service by any such agent shall have the same legal force and validity as if duly served upon such nonresident carrier personally, and such designation shall be in writing, shall give the name and address of such agent or agent,and shall be filed in the office of the Commission, Upon failure of any nonresident motor carrier to file such designation with the Commission or to maintain such an agent in this State at the address given, such nonresident carrier shall be conclusively deemed to have designated the Secretary of State and his successors in office as such agent; and service of process upon or acceptance or acknowledgment of such service by the Secretary of State shall have the same legal force and validity as if duly served upon such nonresident carrier personally, provided, that notice of such ser vice and a copy of the process are forthwith sent by registered mail by the Secretary of State, or his successor in office, to such non resident carrier, if its address be known. Service of such process upon the Secretary of State shall be made by delivering to his office two copies of such process with fee of three ($3 00), (b^ Except in those cases where the State Constitution - 10- requires otherwise, any action against any resident or nonresi dent motor carrier for damages by reason of any breach of duty, whether contractual or otherwise, or for any violation of the provisions of this Chapter, or of any order, decision, rule, re gulation, direction, demand, or other requirement established by the Commission, may be brought in the county where the cause of action or some part thereof arose, and if the motor carrier or its agent shall not be found for service in the county where the action is instituted second original may issue and service be made in any other county where the service can be made upon the motor carrier or its agent The venue prescribed by this Section shall be cumulative of any other venue provided by law. (c) The Commission is authorized to enforce the provisions of this Chapter by instituting actions for injunction, mandamus or other appropriate relief. 63-525: REGISTRATION OF ROUTES AND VEHICLES BY MOTOR CARRIERS5 BOND OR INDEMNITY INSURANCE, INTERSTATE COMMERCE: (a) Motor carriers engaged solely in interstate commerce over the highways of this State may operate without certificates, but shall register with the Commission the routes over which they oper ate, the number of motor vehicles and trailers operated by them, and the character and capacity of such vehicles, the forms for such registration to be prescribed by the Commission! and such motor carriers shall give the bond or indemnity insurance pre scribed by Section 68-509 (omitting the protection in respect to their own passengers and cargoes); and such motor carriers shall pay annually the registration fee prescribed in Section 63-518, for each motor vehicle operated by them over the highways of this State. Notwithstanding any other provision to the contrary, any motor carrier engaging solely in interstate commerce and trans porting, either exclusively or otherwise, any of the commodities now or hereafter described in subparagraphs (2) and (2a) of para graph (c) of Section 68-502, shall comply with the requirements of this section*. (b) Where a motor carrier is engaged in both inter state and intrastate commerce, it shall nevertheless be subject to all the provisions of this Chapter so far as it separately re lates to such carrier's commerce done exclusively in this State. It is not intended that the Commission shall have the power of regulating the interstate commerce of such motor carrier, except to the extent herein expressly authorized as to such commerce. Sections 68-510, 68-511, 68-512, 68-515 and 68-519 do not apply to purely interstate commerce nor to carriers exclusively engaged in interstate commerce. When a motor carrier is engaged both in intrastate and in interstate commerce, it shall be subject to all the provisions of this Chapter so far as they separately relate to its commerce dene in this State. - 11- 68-618i AGENTS FOR SERVICE ON NONRESIDENT MOTOR COMMON CARRIERS| SERVICE OF PROCESS UPON MOTOR COMMON CARRIERS5 VENUE; ENFORCEMENT BY COMMISSION: (a) Each nonresident motor common carrier shall, before any certificate or other authority is issued to it under this Chapter or at the time of registering as required by Code Section 68-633, designate and maintain in this State an agent or agents upon whom may be served all summonses or other law ful processes in any action or proceeding against such motor common carrier growing out of its carrier operations, and service or pro cess upon or acceptance or acknowledgment of such service by any such agent shall have the same legal force and validity as If duly served upon such nonresident carrier personally, and such designation shall be in writing, shall give the name and address of such agent or agents, and shall be filed In the office of the Commission* Upon failure of any nonresident motor common carrier to file such designation with the Commission or to maintain such an agent in this State at the address given, such nonresident carrier shall be conclusively deemed to have designated the Secretary of State and his successors in office as such agent; and service of process upon or acceptance or acknowledgment of such service by the Secre tary of State shall have the same legal force and validity as if duly served upon such nonresident carrier personally, provided, that notice of such service and a copy cf the process are forthwith sent by registered mail by the Secretary of State, or his succes sor in office, to such nonresident carrier, if its address be known. Service of such process upon the Secretary of State shall be made by delivering to his office two copies of such process with a fee of three dollars ($>3 *00). (b) Except in those cases where the State Constitution requires otherwise, any action against any resident or nonresident motor common carrier for damages by reason of any breach of duty, whether contractual or otherwise, or for any violation of the pro visions of this Chapter, or of any order, decision, rule, regulation, direction, demand, or other requirement established by the Commis sion, may be brought in the county where the cause of action or some part thereof arose, and if the motor common carrier or its agent shall not be found for service in the county where the action is instituted second original may issue and service be made in any other county where the service can be made upon the motor common carrier or its agent. The venue prescribed by this Section shall be cumulative of any other venue provided by law (c) The Commission is authorized to enforce the provisions of this Chapter by instituting actions for injunction, mandamus or other appropriate relief MOTOR VEHICLE RECIPROCITY It is not generally khown, but the Georgia Public Service Commission has been the leader in boosting the economy of the state and the southeast through effectuating motor vehicle reciprocity between the state of Georgia and other states. A member of this Commission, Honorable 'Walter R* McDonald, has been Chairman of the Georgia Reciprocal Committee since its creation* As a result of these efforts Georgia has reciprocal agreements with all but sixteen of the contiguous states of the nation* Of particular importance was the completion of the execution of the Multistate Reciprocal Agreement on May 16, 1963, between fifteen states, composed of Alabama, Florida, orgia, Indiana, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, North Carolina, Sbuth Carolina, Tennessee, Virginia and West Virginia* Instead of using the residence of the carrier this agreement has established the basing point agreement, by granting reciprocity to motor vehicles properly registered in the state where the vehicles are based. This agreement is a revision of previous similar agreements, commencing with the Joint Reciprocal Agreement of Ten Southern States on December 17, 1949, which created a Multistate Reciprocal Committee. This Committee meets annually, and has been Chairmaned continuously byHaiorable Walter R. McDonald, a member of this Commission* The Secretary of the Georgia Public Service Commission has also been Secretary of the Multistate Reciprocal Committee since its establishment in 1949* -13- MOTOR CARRIER ENFORCEMENT The Motor Carrier Inspection and Enforcement Division is that arm of the Commission which enables its members to maintain surveillance over the activities of all "for hire" motor carriers conducting operations over the highways of Georgia. During the calendar year 1963 this department employed five motor carrier inspectors domiciled in strategic areas of the state, which enabled each inspector in his assigned territory to give maximum coverage with minimum amount of time and mileage expense. These inspectors operated a total of 103,622 miles with mileage expense of $8,289*76. This operating cost enabled these inspectors to not only accomplish their regular duties but also to collect $13,3^8.00 in motor carrier fees for licenses that other wise might not have been collected by the Commission. In addition, these inspectors were indirectly responsible for the collection of several thousand more dollars in fees remitted by mail. The inspectors' duties are categorized as follows: (l) Routine Inspections of Regulated Intrastate Carriers: (a) Safety Inspections of Vehicles: During the year 1963 inspections were made on 1,320 heavy duty trucks, truck tractors, trailers and buses for violation of the Motor Carrier Safety Regulations promulgated by this Commission. If unsafe mechanical conditions existed, the management of the motor carrier was so advised and required to make the necessary repairs. An affidavit to the Commission certifying that these repairs were made was required of the motor carrier in violation. (b) Inspections of Transportation Rates Applied: Periodic calls were made on all carriers regulated by this Commission to determine if they were assessing the proper rates and charges approved by the Commission and that they were operating within the scope of their authority granted by the Commission. Where violations of the published tariff rates were detected, the violating carrier was required to rebill the shipments in accordance with their proper published rates. Where these violations were prevalent and posed a threat to the shipping public or showed signs of discriminatory practices, the Commission issued a rule nisi against the carrier to show cause why its certificates should not be suspended and/or revoked for failing to comply with the Commission's rules and regulations. Where viola tions were of a nature that the Commission felt they could be corrected with proper guidance from the staff, the carrier was asked to come to the Atlanta offices for consultation. During the year conferences were required with only six motor carriers, who were advised of the necessary steps to place them in compliance with the tariff rules and other regulations of the Commission. This is a marked decrease from the sixty-two conferences held with motor carriers during the calendar year 1961, when this program was first initiated. In 1962 conferences were held with fourteen carriers. We believe that this is a healthy indication that the motor carriers are more conversant with the tariff regulations promulgated by this Commission and, consequently, are exercising more care in the rating and billing of their shipments. (c ) Service and Facility Complaints: This department has worked very closely with the Transportation Rates Division on complaints involving the service and facility condition of the passenger bus companies providing intrastate transportation for the citizens of Georgia. Inspection of the sanitation conditions of bus terminals in the state by this department has resulted in the up grading of these facilities. In addition, inspectors have checked highways under construction to determine if such construction creates a hazard, for passenger transportation and required a re-routing of bus traffic because of such hazard. Complaints involving the service of motor freight carriers have been investigated by this department and where service has been determined to be sub-standard the carriers were required to improve such service. All such complaints for the year 1963 have been handled to the satisfaction of the complaining shippers. (2) Registration of Interstate Carriers. Through the efforts of our field inspectors and informa tion carried in trade Journals, this department is continuing its program of registration of those carriers engaged solely in inter state commerce over the highways of Georgia, under permits from the Interstate Commerce Commission, or who are engaged in the "for hire transportation of "exempt commodities" under the Federal Motor Carrier Act of 1935 During the year 1963 this Commission issued ij-31 operating permits and 26,542 reciprocal cab cards to such carriers. The Motor Carrier Acts of 1931 require such registra tions so that citizens of Georgia may be certain that these carriers are properly insured and financially responsible if they should become involved in an accident within the State of Georgia resulting in property damage, injury or death to any of the citizens of this state. Further, such carriers are required to designate an agent for service. While performing the foregoing duties our motor carrier inspectors made 2 ,36^ personal contacts with carriers, shippers, receivers, city and county officials, and other interested parties. (3 ) Illegal Transportation Problem. Because of the increasing concern over the illegal or "gray area" transportation problem, both on the state and national levels, special emphasis is being placed by this Commission on the apprehension and conviction of these illicit operators who are undermining the regulated rail and motor carrier transportation services. While conducting special road checks in an effort to apprehend violators of our Motor Carrier Acts, the inspectors have "spot checked" well over 10,000 vehicles for vehicle registration, authority and safety, in addition to 1,320 vehicle inspections previously mentioned in this report. Also, numerous shippers using the services of unlawful carriers wrere given letters of warning with copies of the Georgia law, which provides that the shipper who aids and abets violators is also subject to prosecution as a misdemeanor. The Commission's Arrest Report Digest for the year 19&3 lists a total of 169 cases either handled by the courts or presently pending . Copies of this Arrest Report Digest are available upon request. This total reflects the Enforcement Department's activities in the apprehension and conviction of persons operating as motor carriers "for hire" either without appropriate intrastate authority from this Commission or without an appropriate registration of an interstate operating authority from the Interstate Commerce Commission. It should be noted that Georgia Law requires the registration of all "for hire" motor carriers using the highways of our state even though they may be transporting commodities exempt from the economic juris diction of the Interstate Commerce Commission. These court actions have resulted in fines or bonds totalling $1 3 ,3*10.50 and I l k months in suspended sentences. Cases were filed in 28 different counties and bond forfeitures or fines remained in the county where the arrest was made. During June, 1963, this department, in cooperation with the regulatory Commissions of 39 States and the Interstate Commerce Commission, Bureau of Motor Carriers, conducted a seven day road survey in an attempt to determine the percentage of traffic moved by unlawful motor carriers in the United States. This was the first attempt to conduct such a road check on a nationwide scale. Resultant statistics have revealed that the various State and Federal Motor Carrier Acts are violated by such "bootleg" motor truck operators to the amount of some 600 million dollars per year in lost revenues to the certificated, legitimate motor carriers. The only answer to the elimination of such unlawful transportation is the adoption and enforcement of adequate transpor tation laws by the various States and the vigorous prosecution at a state level of these illicit truck operators before their activities weaken or destroy the common carrier industry of this country, both truck and rail. To increase such enforcement in Georgia will necessitate the employment of additional field and office personnel. Results of the above mentioned road survey are available on request from this office or may be found in the report of the 1+8TH Spring Conference of the Southeastern Association of Railroad and Utilities Commissioners held at Biloxi, Mississippi, April 6 - 18, 196k. Mr. Donald J. Lawrence is Director of the Commission's Motor Carrier Inspection and Enforcement Division, and the names and addresses of the five inspectors presently employed by the Commission are: Herbert R. Daugherty, W. E. Doolittle, Smyrna, Georgia Sandersville, Georgia A. J. Fort, Route 1, Morrow, Georgia James H. Hooks, Jr. Donalsonville, Georgia T. S. Tyson, Swainsboro, Georgia. CIVIL LITIGATION This division of the Report is devoted to a review of the civil litigation experienced by the Public Service Commission during the calendar year 1963, but does not include litigation pending at the year's end which is reserved for review in the next annual Report of the Commission. The criminal cases instituted by law enforce ment officers of the Commission during such period are summarized in the division of this Report entitled "Motor Carrier Enforcement". Case No. A-98641 in the Superior Court of Fulton County, Georgia, BAGGETT BULK TRANSPORT, INC. v. GEORGIA PUBLIC SERVICE COMMISSION. ________________ On February 8, 1963, Baggett Bulk Transport, Inc., the holder of Class "BM Certificate of Public Convenience and Necessity No. 1270, filed an action in Fulton Superior Court for declaratory relief against the Public Service Commission* More particularly, Baggett's petition request ed that the court declare that Certificate No. 1270 (con taining no specific authorization for use of tank equip ment) authorized the transportation of dry cement in bulk in hopper-type vehicles and that the provisions of Exception 4 to Rule 8 of the Commission's Motor Carrier Rules, requiring specific authorization to transport commodities in tank equipment, did not apply to hoppertype vehicles. On March 8, 1963, the Commission filed its general demurrers and answer denying that Baggett was entitled to the relief sought. The court scheduled a hearing on the demurrers for March 29, 1963* At the hearing, presided over by Judge Virlyn B. Moore, J & M Transportation Co., Inc., Schwerman Truck ing Company, and Petroleum Carrier Corporation intervened in the case in support of the Commission. Thereafter, counsel for the Commission argued the following grounds of demurrer: that Baggett was estopped from maintaining the action because it attacked the tank equipment limita tion, which was a part of Certificate No. 1270 at the time of its acceptance by Baggett; that the petition constituted a collateral attack on the correctness of -13- the Commission's order of October 25, 1962, construing Exception 4 to Rule 8 of the Commission's Motor Carrier Rules ; and that the remedy of declaratory judgment was inappropriate because of the availability of a remedy for injunctive relief* At the conclus ion of this argu ment, counsel for Baggett obtained a continuance of the hearing until April 19, 1963, in order to gain time for the preparation of a response* On April 17, 1963, Baggett voluntarily dismissed its petition against the Commission* Case No* A-101706 in the Superior Court of Fulton County, Georgia, J & M TRANS PORTATION CO., INC, v. GEORGIA PUBLIC SERVICE COMMISSION and MITCHELL TRANS PORT, INC. Case No. A-101707 in the Superior Court of Fulton County, Georgia, J & M TRANS PORTATION CO., INC. v. GEORGIA PUBLIC SERVICE COMMISSION and BAGGETT BULK TRANSPORT. INC.________________________ On July 5, 1963, J & M Transportation Co., Inc., instituted the above cases to enjoin Mitchell Transport, Inc., and Baggett Bulk Transport, Inc*, from transporting cement in bulk in tank equipment pursuant to recent grants of authority by the Public Service Commission. On this day, counsel for J & M presented its petitions in these cases to Judge Durwood T. Pye? and requested the issuance of immediate temporary restraining orders prohibiting Mitchell and Baggett from operating under their newly acquired authority. After an all-day hearing on the matter, Judge Pye refused to temporarily restrain the Commission and Baggett but did temporarily restrain Mitchell from operat ing in order to maintain the status quo because Mitchell had not yet begun operation. Subsequently, the applications for preliminary injunc tions in the Mitchell and Baggett cases were scheduled for hearing on July 30 and 31, 19o 3 , respectively, before Judge Virlyn B. Moore* On July 30th, after hearing extended oral argument from all parties on the application for preliminary injunc tion in the Mitchell case, Judge Moore denied the applica tion on the gfounE~that the Commission's action was -19- supported by sufficient evidence, and dissolved the temporary restraining order imposed by Judge Pye. Soon after this order was entered by Judge Moore, counsel for J & M dismissed its petition in the Baggett case. No appeal was taken from the order in the Mitchell case. Case No. B-955 in the Superior Court of Fulton County, Georgia, J & M TRANSPORTA TION CO., INC. v. GEORGIA PUBLIC SERVICE COMMISSION and BAGGETT BULK TRANSPORT. INC. On September 25, 1963, J & M Transportation Co., Inc., instituted the above case against the Public Service Commis sion and Baggett Bulk Transport, Inc., seeking to enjoin Baggett from transporting cement in bulk in hopper-type vehicles on the ground that authority to do so was granted on the basis of insufficient evidence. J & M sought an immediate'temporary restraining order against Baggett's operation, but such relief was denied by Judge Claude D. Shaw. On October 28, 1963, the Commission filed its general demurrers, plea of estoppel and answer in response to the petition. On February 6, 1964, J & M dismissed its petition. Case No. 14399 in the United States Court of Appeals for the Third Circuit, SOUTHERN NATURAL GAS COMPANY v. FEDERAL POWER COMMIS SION and GEORGIA PUBLIC SERVICE COMMISSION. In April 1963, the Southern Natural Gas Company instituted the above case to review and set aside the Federal Power Commission's Opinion No; 379 and Order Determining Rates, issued February 18, 1963, in its Docket Nos. G-20509 and RP60-15, as modified by the FPC's subsequent order of March 7, 1963, upon Southern's applica tion for rehearing. In this proceeding, Southern was aggrieved by the action of the FPC, as reflected by such Opinion and Order, in reducing the 6.5 percent rate of return (tentatively fixed in its interim order of July 8, 1960, in Docket No. G-20509) to 6.24 percent through the - 20- inclusion of accumulated deferred Federal income taxes in Southern^ capitalization at an allowance of 1.5 percent. Obviously, the treatment of such accumulated deferred Federal income taxes for rate making purposes had a sub stantial affect upon the rates charged by Southern in the sale of natural gas for consumption in Georgia. Conse quently, in order to protect the interests of Georgia consumers, the Public Service Commission on May 2, 1963, filed its motion for leave to intervene in the above case with the Court. On May 9, 1963, the Court granted the motion. On May 24, 1963, the Court, pursuant to the joint motion of Southern and the FPC, ordered that further proceed ings in the above case be held in abeyance until such time as the Supreme Court disposed of the petition for a writ of certiorari in Panhandle Eastern Pipe Line Company v. Federal Power Commission (ffio. 2T/, Oct. Term, 1963 j. The Panhandle case involved substantially the same issue as the above case, and the decision of the lower court in Panhandle (CA - DC - 1963), 316 F. 2d 659, was in favor of the FPC. On October 21, 1963, the Supreme Court denied this peti tion for a writ of certiorari. On November 22, 1963, the Court, pursuant to the agree ment of counsel in the above case and in the light of the Panhandle decision, dismissed the case. This dismissal was of course favorable to the position of the Public Service Commission. Civil Action No. 8591 in the United States District Court for the Northern District of Georgia, Atlanta Division, GRACE W. THOMAS v. GEORGIA PUBLIC SERVICE COMMISSION, ALLEN CHAPPELL and ATLANTA TRANSIT SYSTEM. INC. On September 30, 1963, Grace W. Thomas instituted a class action against the Public Service Commission, Allen Chappell and the Atlanta Transit System, Inc., to enjoin the Commission from granting a rate increase to Atlanta Transit. On October 1, 1963, the Commission issued an order, effective October 5, 1963, authorizing Atlanta Transit and the Metropolitan Transit System, Inc., to increase fares for transit bus service. On October 3, 1963, the Court issued an order scheduling a hearing in - 21- the case for October 9, 1963* At the hearing, presided over by Judge Lewis R* Morgan, counsel for the Commission and Allen Chappell filed a motion to dismiss with supporting affidavits and a brief on the grounds that: (a) the Commission was improperly served; (b) the complaint was speculative and pre mature on its face because it sought to enjoin an order not in existence at the time the complaint was filed; (c) the complaint was moot because the issuance of the order it sought to enjoin had been issued prior to the hearing; (d) the claim stated by the complaint was barred by 28 U. S. C., Section 1342 (62 Stat. 932); (e) the Court should abstain from exercising its equitable jurisdiction over the subject matter of the case pending an authoritative determi nation by the Georgia courts as to the validity of the claim stated by the complaint; (f) the plaintiff failed to exhaust her administrative remedy before the Commission^ (g) the federal questions alleged in the complaint were frivolous and unsubstantial; and (h) the complaint failed to state a claim against the defendants upon which relief could be granted. These grounds were asserted before the Court during the hearing and upon its conclusion, the Court took the case under advisement. On October 31? 1963, the Court entered an order dis missing the complaint on the ground specified as (d) above, although the Court stated that the other grounds of the motion to dismiss appeared to have merit. Case No. B-2394 in the Superior Court of Fulton County, Georgia, GEORGIA PUBLIC SERVICE COMMISSION v. ALLIED FOOD DISTRIBUTORS. INC.______________________________ As the result of a road check in June 1963 and subse quent investigations, the law enforcement officers of the Public Service Commission determined that Allied Food^ Distributors, Inc. (a Georgia corporation with its princi pal office in Atlanta), had engaged in transportation without registering or obtaining a certificate as required by the State Motor Carrier Acts. The management of Allied stated that it did not realize that the transportation was conducted in violation of Georgia law and that it was anxious to settle the matter in as peaceful a fashion as possible. Consequently, Allied was agreeable to a judgment - 22- being rendered perpetually enjoining it from engaging in such transportation in the future. In accordance with this agreement, the Commission filed the above suit against Allied on December 10, 1963, for a perpetual injunction prohibiting a recurrence of such illegal transportation. Allied immediately acknowl edged service of the Commission's petition, filed its^ answer in response thereto, and consented to the rendi tion of judgment against it Consequently, the Court, presided over by Judge Luther A1verson, entered a consent judgment on the day the petition was filed perpetually enjoining Allied from again operating as a motor carrier in this State without first complying with the State Motor Carrier Acts. k ie -k ie No effort is made here to recapitulate the many conferences, advices and other services rendered to the Commission during 1963 Nor does this review include such matters as: participation In negotiations with the manage ment of Blue Ridge Telephone Company during January 1963 concerning its premature increase of telephone rates, which resulted in the refund of the over-charges involved; or the representation of the interests of the Commission during May and June 1963 in Consolidated Cause No. 197 in the United States District Court for the Southern District of Georgia, Augusta Division, Virginia Iron, Coal & Coke Company v. Georgia & Florida R a i l r o a d T h e l T e w Y ork Trust Company ~v Georga^ Florida RairoaS, et aT, aoncern m g the purehase or the Georgia & !f lorIda Railroad by the Southern Railway Company; or the representation of the Commission before the FPC in the Matter of Southern Natural Gas Company, Docket Nos G-20509 and RP60-15, and in the Matter of Georgia Power Company, Docket No. E-7099. The Commission was represented during the period of this Report by Eugene Cook, Attorney General, and Paul Rodgers, Assistant Attorney General. -23- TRANSPORTATION General During 1963, the Commission and its transportation staff officially disposed of, in addition to the formal proceedings listed below (most of which were made the subject of written opinions), 6^7 transportation rate and service matters, a considerable number of which required lengthy studies and investigations in the field. FORMAL CASES FOR TEAR 1963 Docket No. Date 497-R 531-R 1 -16-63 ^98-R 532-R 1-16-63 Subject Disposition Application of Atlantic Coast Line Railroad Company for authority to discontinue agency service at Ambrose Approved Application of Railway Express Agency, Inc*, for authority to close the express office at Ambrose, contingent upon the closing of the railroad agency at that point Approved 533-R 53^R 535-R 536-R 1-16-63 I-I6-63 I-I6-63 Application of Railway Express Approved Agency, Inc,, for authority to make applicable on Georgia intra state traffic the increased rates contained in Railway Express Agency Local and Joint Schedule of First and Second Class Express Rates 18-D Application of Central of Georgia Rai.lway Company for authority to discontinue agency service at Porterdale Approved Application of Railway Express Agency, Inc*, for authority to close the express office at Porterdale, contingent upon the closing of the railroad agency at that point Approved 1-16-63 Application of Railway Express Agency, Inc*, for authority to close the express office at Oconee Approved 1937-M 1-16-63 Investigation of rates, charges Revised regulations rules and regulations governing prescribed charter bus operations - 2h - FORMAL CASES FOB YEAR 1963 (Continued) Docket No Date 2nd Supp. 2-19-63 477-R Subject Disposition Application of all railroads to increase Georgia intrastate rates and charges to the same extent as authorized on inter state traffic by the Interstate Commerce Commission in Ex Parte 223 Previous orders modified to permit increase in termi nal switching charges Supp 206I-M 2303-M 3-1-63 Application of Davis Transport Application with Company, Inc., and Petroleum drawn by Davis Carrier Corporation for revision Transport Company, of asphalt rates to a county Inc., and previous wide destination basis, with order of Commission such rates to reflect increase vacated over existing rates 4-18-63 Application of Manufacturers Transport (Class "E" Motor Carrier) for adjustment of rate on burlap bagging or c3.oth from Savannah to Albany Reduced rate authorized for Manufacturers Trans port and for all motor common car riers having authority to par ticipate in the traffic 5^1-R 4-23-63 Application of Railway Express Agency, Inc., for authority to close the express office at Bowersville Denied 1st Supp. 464-R 4-23-63 Application of Central of Georgia Railway Company for authority to discontinue opera tion of its passenger trains Nos. 17 and 18 (The Flamingo) between Atlanta and Albany Application approved in light of unfavor able results of additional test period with approval subject to establish ment of adequate substitute facili ties for the handling of mail and express 542-R 5-10-63 Application of Central of Georgia Railway Company for authority to retire and remove a portion of its spur tracks and side tracks located in its Thomaston District, principally serving the Thomaston Peach Growers Association, including the Thurston & Smith Siding and High-Hill Siding Withdrawn - 25 - FORMAL CASES FOB YEAR 1963 (Continued) Docket No, Date Subject Disposition 537-R 538-R 5-20-63 Application of Southern Railway- Approved Company for authority to dis continue agency service at Canon to discontinue handling lessthan-carload shipments at that point and to dismantle the station building at Canon 5-20-63 Application of Railway Express Agency, Inc,, for authority to close the express office at Canon, contingent upon the closing of the railroad agency at that point Approved 539-R 5^0-R 5-20-63 Application of Southern Railway Company for authority to dis continue agency service at Martin; to discontinue the handling of less-than-c arload shipments at that point and to dismantle the station building at Martin Denied 5-20-63 Application of Railway Express Agency, Inc,, for authority to close the express office at Martin, contingent upon the closing of the railroad agency at that point Denied 2nd Supp. 219T-M 2246-M 5-29-63 Application of Walker Hauling Company, Inc,, and Petroleum Carrier Corporation for authority to establish volume incentive rates on liquid petroleum products, in bulk Revised incentive basis rules pre scribed 5^3-R 7-17-63 Application of Seaboard Air Denied with pro Line Railroad Company for vision for review authority to discontinue agency after 12 month service at Montrose; to discon test period tinue handling less-than-carload shipments at that point and to dismantle the station building at Montrose 5^-R 7-17-63 Application of Railway Express Agency, Inc., for authority to close the express office at Montrose, contingent upon the closing of the railroad agency at that point - 26 - Denied FORMAL CASES FOB YEAR 1963 (Continued) Docket No# Date Subject Disposition 5^5-h 5^6-R +7-R 5^8-R 517-R 550-R 551-R 7-17-63 8-7-63 8-13-63 9-6-63 Application of Southern Railway Approved Company for authority to discon tinue agency service at Meansville; to discontinue handling less-thancarload shipments at that point and to dismantle the station building at Meansville Application of Georgia 85 Florida Railway Company for authority to discontinue agency service at Willacoochee Approved Complaint of citizens of Adel Service found of inadequacy of service to adequate and com patrons of Georgia 8s Florida plaint dismissed Railway by the consolidated Georgia Southern 8s Florida Railway-Georgia 8b Florida Railway freight agency at Adel Protest against proposal of Complaint withdrawn Southern Freight Tariff Bureau and proceeding dis- to make revisions in certain of missed its tariffs to provide that single line rate scales would apply in determining rates involving joint line movements over the Central of Georgia Railway, Georgia 8b Florida Rail way, Savannah and Atlanta Railway and Southern Railway System 10-17-63 Application of Central of Georgia Railway Company for authority to reduce the hours of service of its agencies at Rossville and Chickamauga to the extent necessary to permit one agent during regular hours of work to serve both agencies Approved 10-17-63 Application of Railway Express Agency, Inc., for authority to close the express office at Crawford Denied 10-21-63 Application of Louisville and Nashville Railroad Company for authority to discontinue agency service at Mineral Bluff; to discontinue handling less-thancarload shipments at that point and to remove the station building at Mineral Bluff - 27 - Approved FORMAL CASES FOR YEAR I963 (Continued) Docket Ho. Date Subject Disposition 1st Supp. I937-M 553-B 10-21-63 Investigation of rates, charges, Prescribed rules rules and regulations governing amended for clari- charter bus operations fication H - l -63 Application of Seaboard Air Approved Line Railroad Company for authority to discontinue agency service at Louvale; to discon tinue handling less-than-earload shipments at that point and to dismantle the station building at Louvale 2^97-M 2509-M 2524- M 2525- M 552-R 253O-M 12-13-63 Application of Southern Greyhound Lines, Division of the Greyhound Corporation, and Tamiami Trail Tours, Inc., for authority to increase commuter fares to 1.75 cents per mile, subject to minimum fare of 18 cents per ride (except no change sought between Atlanta and Villa Rica and intermediate points) Approved I2-I3-63 Applications of Petroleum Carrier Corporation and Walker Hauling Company, Inc., for authority to establish volume incentive rates on caustic soda, in tank trucks, from Brunswick to Doctortown Incentive plan approved 12-13-63 Application of Atlantic Coast Line Railroad Company for authority to discontinue agency service at Naylor Approved 12-18-63 Application of Georgia Highway Express and Central of Georgia Railway Company for authority to publish for their account in Georgia Motor Trucking Association Tariff 1-B, GPSCMF No. 6, joint through rates and routes the same as published for motor carrier application in that tariff - 28 - Joint rates on burlap bagging or cloth approved, subject to provision that railroac where requested by othf motor carriers, join ix similar arrangements with such other carri ers, except where the Commission, after review of justifica tion therefor, shall permit railroad to decline to so partici pate. Jurisdiction over proceeding retaine for further considera tion. BUS FARES AND SERVICES For the second year in succession, there was no application filed during 1963 for increase in basic hus fares. As pointed out in last year*s report, the present fare level of 2.75 cents per mile was found by the Commission in 1961 to represent an adequate contribution from Georgia intrastate traffic to the over-all operating expenses of the bus lines, and the revenue obtained from that fare level, plus the substantial earnings from intrastate transportation of bus express, has been sufficient to prevent the carriers from seeking further increases in the basic bus fare structure. There has long been, however, varying levels of commutation fares applicable on different lines throughout the State, and in some instances on different branches of the same line. Particularly was the latter true on the routes of Southern Greyhound Lines, the Georgia Division of the Greyhound Corporation, which is the current company operating the former Teche Greyhound, Atlantic Greyhound and Southeastern Greyhound lines. For many years the commuter fares of Southeastern Grey hound Lines were lower than those on Atlantic Greyhound Lines. There was further discrepancy in the commuter fares in the State caused by the fact that such fares on Tamiami Trail Tours, Inc,, while the same as those on the old Southeastern Greyhound Lines, were lower than those on the old Atlantic Greyhound Lines. The last increase in these fares was authorized in January of 1958 - that increase amounting to 5 per cent over the then existing fares. No provision was made at that time to place the fares of these companies on the same basis. By application dated June 12, Southern Greyhound Lines sought authority to increase fares between all points on its lines (except between Atlanta and Villa Rica and intermediate points) to 1.75 cents per mile - that being the basis applicable on the former Atlantic Greyhound portion of this company. By application dated October 4, Tamiami Trail Tours, Inc., made application for authority to make similar increase in commuter fares between points on its line. Both companies sought the establish ment of a minimum commuter fare of $1.8 0 for 10 rides. Although the applications were given widespread notice, no one indicated any such opposition by letter or telephone call. It was developed at the hearing that the commuter fares in surrounding States varied from I .83 cents to 2.48 cents per mile - all higher than that proposed for Georgia application - and that the proposed basis would still result in fares to the commuters traveling to and from Atlanta considerably lower, mile for mile, than those applicable on the Atlanta transit systems. Following showing of the cost of providing this service, and the need for adjustment to provide uniformity in fares on these two major systems, the Commission found that while there was indication that the adjusted fares still would not completely cover the fully distributed cost being incurred by the bus lines in their commuter operation, the increased revenue therefrom would considerably aid these carriers in sustaining this important segment of their operations so necessary to those dependent upon such service, and approved the increased uniform basis of commutation fares for these two carriers. - 29 - For many years the Commission has received complaints from various hus lines concerning the greatly disordered and confused situa tion existing in the rates, charges, ru3.es and regulations governing charter "bus operations in the State of Georgia, The condition worsened to the point where the Commission early in i960 sought informal agreement from the carriers for unifoim regulations, rates and charges for the operation of interstate charter buses but little was accomplished from this approach. Accordingly, on July 12, 1961, the Commission issued a Rule Nisi against all Class "A" Motor Carriers of Passengers certificated to perform charter coach operations within the State of Georgia, to appear at public hearing and show cause why the Commission should not prescribe for those carriers rates and charges for charter coach service, uniform rules and regulations governing charter services and uniform forms for maintaining records of intrastate charter coach operations. Following public hearing and several subsequent extensive conferences between the carriers and the Commission's staff, it was finally developed that it would be impracticable at this time to prescribe uniform rates and charges for this type of operation because of the widely varying types of equip ment and public demand for different services, and, therefore, no action was taken on the rates and charges feature of the investigation. The Commission did develop, however, a set of uniform rules and regulations designed to eliminate the confusion as to the method of determining charges for this service, and by order dated January 16, prescribed such rules and regulations for State-wide application on charter bus operations. In actual application of these new rules and regulations, it was found necessary to amend several rules for clarification, and by order dated October 21, such amended rules were prescribed. It is believed that many of the complaints received from both the public and the carriers concerning the charter bus operation of the State's bus lines will be eliminated b y strict application of these new charter bus rules. It was pointed out in last year's report that the bus industry in Georgia has continued to provide excellent service at reasonable fares and with adequate operating ratios, with the only significant exception being the financial difficulties of one urban type carrier in the Atlanta metropolitan area, Dahlonega-Atlanta Coach Lines, Inc,, which was then in serious financial straits. The economic difficulties of this carrier persisted and effort was made by that line during the year to sell its operating authorities to other major lines. Following temporary opera tion by an out-of-State based carrier, the routes of this line were taken over late in 1963 by Smoky Mountain Stages, Inc., which has instituted service on the line far superior to that offered by the financially weak carriers formerly operating over this route. It is believed that the assumption of this service by this major carrier offers prospect of long term good bus service to this area so long dependent on the marginal operations of financially distressed operators. Other than the Dahlonega-Atlanta Coach Lines, Inc,, there has continued during the year a substantial stability in the services rendered by the bus lines within the State. While there have been the normal adjustments concerning system riding characteristics and other changes in operational patterns, there has been no major service adjustment during the year. - 30 - TRUCK RATES There was discussed in last year's report, volume incentive rate plans approved by the Commission for application by motor carriers transporting liquid petroleum products in bull:. Two such incentive plans were placed into effect but experience soon indicated need for adjustment in some of the rules and regulations to permit the use of the plans by smaller shippers while still maintaining the required utilization of equipment. By order dated May 29* 1963* the Commission approved such modifications to the basic incentive plans, finding that such changes would not alter the concept of the plan or the practicality of its oper ation and that the proposed amendments would not make a substantive change in the competitive relationship between the motor and rail carriers. Prior to 1963, the Georgia Motor Carrier Act required that rates prescribed by the Commission for account of contract motor carriers must be the same as those prescribed for common carriers. Under such a provision it was most difficult for the contract motor carriers to initi ate a rate change since the burden would be on them to prove proposed rates just and reasonable not only for the public and the Class "E" carriers, but also for the common carriers authorized to transport the same traffic. This provision of the law often prevented the public from realizing the benefit of the lower costs incurred by Class "E" carriers in operations for such shippers where the contract carriers did not incur the extensive overhead costs of the common carriers. In recognition of this fact, the Commission requested the General Assembly to enact a change in the Motor Carrier Act which would permit the Commission to determine just and reasonable rates for the contract motor carrier oper ations on the same basis as it determines such rates for the common carrier operations. The 1963 General Assembly authorized such a change in the Georgia Motor Carrier Act. The first case under the new provisions of the Contract Carrier Act arose late last year when by petition dated October 31* 1962, Manufacturers Transport, a contract carrier holding Class "E" Certificate of Public Convenience and Necessity authorizing, among other things, the transportation of general commodities for account of A. & M. Karagheusian, Inc*, (a manufacturer of rugs), sought authority to establish a reduced point-to-point commodity rate on jute cloth used by A, & M. Karagheusian, Inc., as backing material for its rugs. Inasmuch as the application was submitted prior to the change in law, it sought approval of the rate adjustment for account of both Manufacturers Transport and all of the other motor carriers having authority to transport this traffic. The application was heard on that basis and was opposed by the fixed route motor carriers, who, while acknowledging their failure to participate in this traffic because of the lower rates of the railroad "piggyback" services, objected to the proposal because of its anticipated impact on the large movements of the same material to other Georgia destinations. The Commission found that the adjustment proposed would result in earnings compensatory to the contract carrier and would permit it to compete with the railroads for this important traffic. The Commission recognized that the substantial reduction in rates here involved, if unrealistically and unnecessarily spread to the points in North Georgia where there is heavy consumption of this material, would greatly diminish the common carriers* earnings on that traffic which earnings had already been reduced by the necessity for handling in joint line service, but that there remained - 31 - the economic fact of life that the shipper here involved was not going to use the services either of this contract motor carrier or competing motor common carriers at the existing rate or at the rate proposed as substitute by the motor common carriers The Commission found that the traffic involved was very important to the applicant, that participation therein would be compensatory to competing motor common carriers who could provide single line direct service, that to deny the application would not prevent the spread of "piggyback" service to the other important consuming points in Georgia, and with the conclusion that it would much prefer to see realistic adjustment of motor carrier rates where bona fide competitive conditions demand and warrant such adjustments rather than the automatic loss of such traffic due to the failure to consider such changes, the Commission, under the provisions of the 1963 amendment to the Georgia Law, authorized the applicant to establish the desired rate without requiring that such rate be established by the common carriers, but did permit any such common carriers as had the appropriate authority and so desired to participate in this traffic by the publication of the same rate There is a large and steady movement of caustic soda from two suppliers at Brunswick to a major user of that commodity at Doctortown. The movement of this commodity between these points is in such large volume and so attractive to the carriers transporting the traffic that the Commission has been faced with repeated applications to reduce rates for such transportation. Justification for such reduced rates has generally been the threat of diversion to private transportation, and during the past five years, the Commission has authorized reductions in this rate down to 10 cents per 100 pounds. By application dated June 22, Petroleum Carrier Corporation sought authority to effectuate further reduction in the transportation charges on this traffic by the establish ment of a volume incentive rate plan at a rate of 8 cents per 100 pounds, subject to round-the-clock operation transporting a minimum of 36 loads per week with a minimum of 3500 gallons per load. By application dated July 10, Walker Hauling Company, Inc., sought authority to establish a similar volume incentive plan with the rate further reduced to 7 cents per 100 pounds and an additional volume incentive plan subject to a higher volume per week at a rate of 608 cents per 100 pounds. The Atlantic Coast Line Railroad, which has constantly maintained a rate parity with the motor carriers on this traffic, objected to the proposed reductions as a needl.ess dissipation of revenue in view of the fact that the traffic was freely moving under the existing rate - a rate which had been established at the request of the shippers supported by the receiver, and which had for its purpose the forestalling of private carriage. Following public hearing on the two applications (which were consolidated for hearing on a single record), the Commission found that the traffic here involved was short haul traffic, large in volume and non-seasonal in nature, was highly susceptible to private carrier competition and that the demonstrated experience of the motor carriers in handling the traffic in the normal course of operation was convincing that the pro posed incentive plan could be operated at a substantial reduction in rates. The Commission concluded, however, that the industries here involved would turn to private carriage unless there was approved a rate sufficiently close to private carrier cost to make such private operation unattractive, and in the light of that finding permitted the establish ment of a rate of 7 cents per 100 pounds for application via the motor carriers of the proposed volume incentive plan, based on round-the-clock operation. While the Commission's order did not then permit the Atlantic - 32 - Coast Line Railroad Company to apply the same rate, it was pointed out therein that on showing of a proposal to handle this traffic on a basis which would result in a sufficient lessening of railroad costs, the Com mission would permit reduction in railroad rates to the truck level. For many years, the Commission s regulation of the operations of the Class "B" motor carriers has been handicapped by inadequate or non-existing tariffs of many of such carriers. Many of the (Hass "B" operators axe small and are conducted by operators who have little experience in tariff matters, and although the Commission had offered the technical assistance of its staff in providing individual tariffs, that program had been found to offer only a partial solution of the Class "B" carrier tariff problem. Accordingly, the Commission last year under took to develop for the Class "B " carriers as a group a Rule 8 Commodity Tariff which would contain basic mileage rates on all of the commodities shown in the appendix to the Commission's Motor Carrier Rule 8, together with simple rules and regulations which could be understood by the most inexperienced Class "B" operator and made suitable for general Class B carrier application. The rates in this tariff were designed to reflect the level of existing rates applied by Class "B" carriers which were actually transporting the traffic. In the absence of existing State wide rates on some commodities, the Commission developed rate scales based on average costs of operations of the Class "B" carriers as reflected in the statistical reports of revenues and expenses filed by those carriers. Participation in the tariff was to be voluntary but any carrier not participating therein was to be officially required to promptly file with the Commission complete tariff covering its entire certificated Georgia intrastate operations. The tariff was completed early in the year and issued to become effective on March 15, Every Class "B" carrier was tendered opportunity to participate in the tariff and 87 availed themselves of that privilege by executing appropriate instructions. The directive to either participate in this tariff, or file individual tariffs, was vigorously followed up with the result that the rate regulation of this class of carriers has substantially improved. As mentioned above, the General Assembly this year passed a bill deleting from the Motor Carrier Acts the requirement that the rates, fares and charges prescribed for motor contract carriers must be the same as those prescribed for motor common carriers. As a result of this change in the law, the Commission can now consider rate filings by Class "E" contract carriers without the necessity of prescribing such rates for all motor carriers of property - a condition which permits far more effective and realistic regulation of contract carrier rates. In the past, since contract carrier rates had to be the same as common carrier rates, there was no purpose in requiring the publication by contract carriers of tariffs covering their operations. The Commission concluded, however, that the proper regulation of contract carrier rates under the revised law would require that all contract carriers file with the Com mission tariffs covering all transportation performed by such carriers under their intrastate certificates. By order dated April 23, the Com mission made changes in its rules to require such tariff filings and to require the related filings of certain statistical reports. - 33 - RAILWAY EXPRESS In November of last year, the Railway Express Agency filed application seeking authority to make applicable on Georgia intrastate traffic the provisions of its new simplified Local and Joint Schedule of First and Second Class Express Rates, While this tariff was designed primarily to effectuate a simplified restatement of charges on first and second class express traffic, the rate tables included a minor upward adjustment, beginning with a uniform minimum of $2,90 as the one pound charge and continuing with the addition of 10 cents to the graduated and the 100 pound charges (the tables being further simplified by round ing off all charges in 5 cent multiples). Effectively, the increases in rates amounted to 10 to 1 ^ cents per shipment, except for the very short hauls and extremely low weight shipments where the new minimum of $2.90 would apply as compared with the existing Georgia intrastate minima of $2,56 and $2.57* In view of the fact that increases in charges were involved, the Commission declined to approve the new rate structure with out giving the shipping public an opportunity to be heard at public hear ing, At the hearing there was no opposition expressed, nor did the Commission receive any other expressions of objection. Following showing by the Express Agency of the adverse financial results of its Georgia intrastate operations and the benefit of the simplified rate structure, the Commission on January 16 approved this revision in express charges. The Express Agency continued during the year to discontinue its local offices at the smaller towns. As in the past, most of such applications were filed because the railroads had filed applications to discontinue their agencies at the same points (the railroad agent also operating the express office), with the Express Agency applications being generally contingent upon approval being given to the railroad applica tions. Of the contingent applications filed during the year, the Express Agency was permitted to close its offices at Ambrose, Canon and Porterdaie but the need shown for railroad agency operations at Montrose and Martin resulted in the contingent express applications involving those points being denied. Separate applications were made to close the express offices at Bowersville, Crawford, Hiram and Oconee. The Commission found that there was insufficient need for the offices at Hiram and Oconee to justify the cost of the retention of the offices and approved those applications. However, it was found that the need of Crawford and the surrounding trade area in Oglethorpe County, the amount of express traffic handled through Crawford and the failure of the Express Agency to show any effort to reduce the cost of servicing this office resulted in the Commission denying that application. The application to close the express office at Bowersville was denied for similar reasons. RAIL PASSENGER SERVICE By order dated January 5, 196l, the Commission denied the application of the Central of Georgia Railway Company for authority to discontinue operations of its Passenger Trains Numbers 17 and 18 (The Flamingo) between Atlanta and Albany. - 3h - The Commission in then denying authority to discontinue Trains IT and 18 pointed out the improvement in the operational results of these trains since the Commission's order of August 6, 1959 in Docket K)6-R denying a prior application to discontinue the "Flamingo" trains* It was further pointed out that there was a prospective agreement between the carrier's management and its employees on a change in crew require ments which would appreciably reduce the indicated losses of the "Flamingo" trains - an agreement which was subsequently executed* The Commission also noted that while it was of the opinion that the application of the Central of Georgia Railway Company should be denied under the circumstances and conditions existing at that time, there could not be overlooked the deteriorating financial condition of the applicant and the potential impact on the applicant of the major merger then being sought by two of its principal competitors. In con sideration of those circumstances, the Commission's original order in this docket provided that its denial of the application would be reviewed at the end of a further test period showing the results of operations of the "Flamingo" trains, as well as the results of operations of the railroad as a whole. The applicant was required to submit monthly reports of the results of operation of these trains for the twelve month period ended August 31> 196l, which reports were timely filed in accordance with the direction in the order. Provision was also made for incorporation into the record of the monthly reports of operation of the Central of Georgia Railway regularly required to be filed with the Com mission. By application dated July 12 of last year, the railroad sought reopening of the record in this train-off proceeding for the purpose of introducing still later statistics of train operations of Passenger Trains Numbers IT and 18. Such application was approved and further hearing was held for such purpose. It was developed that while the revenue earned by these trains in the transportation of mail had increased somewhat since the original hearing in i960, that increase had been far more than offset by a great reduction in revenue earned from the trans portation of express - the earnings from that source having dropped by more than two-thirds. Operational costs generally had increased as reflection of the general increases in costs of all operations, with the exception of crew wages which had been reduced as result of agree ment of the operating unions to permit change in the crew requirement between Atlanta and Albany. As result of increase in wage rates, however, the current crew expense of the trains (even with the change in crew requirement) was only $l8,T6 per month less than the crew cost in 1958. Passenger revenues earned by the trains continued to drop and the number of passengers handled declined from the average of 10 1 per day shown at the original hearing in this proceeding to an average of T6 .6 per day in 1962. Hie Commission found that the deficit operation of the Central of Georgia Railway had already affected the State's shippers in the diminution in supply of freight equipment due to lack of funds for reno vating bad order cars; that the use of the "Flamingo" trains had sub stantially declined and that the revenues therefrom had dropped sharply; that the expenses of operation had not been correspondingly reduced in spite of the cooperation of the Railroad Brotherhoods in adjusting crew requirements; that in the four years since the Central of Georgia Railway originally sought to discontinue the "Flamingo" trains it had incurred an out-of-pocket loss of over a quarter of a million dollars in the pro vision of this service and that while the Commission sincerely regretted - 35 - to authorize the discontinuance of the last passenger trains over any route and was fully sympathetic to the desires of the protestants in this proceeding for the retention of passenger train services, concluded that the Commission would "be derelict in its duties if it forced continued deterioration in - or loss of - essential freight services^by refusing to permit discontinuance of the passenger services of the "Flamingo trains which were being provided for a steadily decreasing number of ^ patrons at steadily mounting losses and reluctantly authorized the dis continuance of the "Flamingo" trains subject to the provision that there be simultaneously established adequate substitute facilities for the handling of mail and express. BAIL F LIGHT In March of 1961, the Commission authorized all rail carriers operating within the State of Georgia to make effective on Georgia intra state traffic not earlier than April 10 of that year increases in freight rates and charges to the same extent as authorized on interstate traffic by the Interstate Commerce Commission in its order of October 20, I960, in Ex Parte 223 - such intrastate authorization being made subject to certain specific exceptions. Among those exceptions were the increases in terminal switching charges (including those charges of the Savannah & Atlanta Railway and its connections on switching movements between Port Wentworth and Savannah and the switching charge to the Atlantic Steel Company on scrap iron moving from interchange tracks of the Southern Railway), By petition dated May 30 of last year, the railroads operating in Georgia sought reopening, reconsideration and amendment of the original order in this proceeding to allow for application on Georgia intrastate traffic of the increases in rates and charges for switching services to the same extent as authorized by the Interstate Commerce Commission in its order of November 22, 1961. Those increases amounted to 20 per cent with a of $3,75 per car on intra-terminal or inter-terminal movements and on "shipments billed to move without interruption in con nection with prior or subsequent line-haul movement and $3,00 per car, per ladle or per crane on intra-plant movements, Inasmuch as this application sought increase in so-called "reciprocal" or line-haul switching charges which had not been included in the original proceeding, and in consideration of the substantial measure of protest against the switching charge increases originally sought, the Commission assigned the petition for further hearing* At that hearing, the application was amended to reduce the Increase sought on intra-plant switching charges to 20 per cent with a maximum of $1,50 per car, Per ladle or per crane to reflect the corresponding reduction in authorization by the Interstate Commerce Commission on interstate traffic. Following the hearing, at which it was stated that five other southern States had already authorized these increases, the Commission found that the expense incurred in per forming the switching services exceeded the revenues then being obtained therefrom, that the applicants* presentation adequately supported the proposed increases from a cost standpoint, and that the continued depressed financial condition of the State*s railroads - particularly that of some of the smaller carriers - and the need for provision of necessary rail services demanded that the Georgia intrastate switching services contribute their fair share of the cost of operation, and the Commission on February 19 accordingly approved the application. - 36 - After lengthy proceedings before the Interstate Commerce Coat- mission, the Southern Railway System during 1963 obtained control of the Central of Georgia Railway, Georgia and Florida Railway and Savannah and Atlanta Railway. Among its proposals in connection with these control proceedings, the Southern Railway had contemplated the necessary revision of rate tariffs to permit the application of single-line rate scales in determining rates involving joint-line movements over these three carriers and the Southern Railway System. "When the revised tariffs were filed on Georgia intrastate traffic protests were received from competing railroads due principally to the impact of the revision on relationships of pulpwood shipping points. Prior to public hearing on the proposal, however, the protests were withdrawn and the Commission permitted the effectuation of this substantial reduction in shipping charges on the number of bulls commodities moving via mileage rate scales within the State of Georgia. There was pointed out in last year's report the continuing increase in trailer-on-flat-car or "piggyback" operations in the State. Those operations had generally been limited to Plan II and Plan III and not until late this year was there a proposal to establish Plan V intra state rates involving joint rail-motor rates for through coordinated rail-motor service. The Central of Georgia Railway joined with Georgia Highway Express and filed application for authority to establish joint rail-motor rates covering such service, with such rate to be at the motor carrier level and published in the motor carrier tariff. Following public hearing, at which it was developed that there were still many details to be worked out by the applicants, the Commission approved the initiation of this joint service for the transportation of burlap cloth or bagging from Savannah and retained jurisdiction over the proceeding with the provision that the record would be kept open for further con sideration in the light of further showings to be made by the applicants. There is discussed later in this report the effectuation of control by subsidiaries of the Southern Railway of the Georgia & Florida Railroad. As is there indicated, prior to the effectuation of that con trol there was disagreement between management and labor as to the labor protective conditions of the control order and in negotiations between the parties broke down to the extent that the line was ordered liquidated. Fortunately, agreement was finally reached which permitted continued operation of the line and which made possible its rehabilitation. In connection with necessary repair of the 43 bridges on the line between Augusta and Valdosta and between Nashville and Moultrie and due to the rehabilitation being undertaken on the entire railroad, the Commission took the unusual step of granting to the Georgia & Florida Railway authority to reroute all Georgia intrastate traffic to and from points on its line by any available route while protecting the published rates. Through the cooperation of all concerned essential operations were con tinued during this difficult period and It is anticipated that early next year rehabilitation will be progressed to the point that operations can be fully restored on the main line between Augusta and Valdosta. RAIL AGENCY SERVICE As pointed out in last year's report, there continues to be a decline in the railroads' program seeking discontinuance of agency services at the smaller stations - principally due to the fact that most of the unprofitable agency operations have already either been abandoned or consolidated with adjoining agencies. This year the Commission - 37 - processed applications involving 13 stations and as has been the case in the past most of these applications were based on the allegation that the type and volume of traffic handled at the involved stations was such as to no longer Justify the continuing increase in cost of maintaining agency service. As is its established custom the Commission adhered to the policy of deciding such applications on the need for and use of the services rather than solely on the statistical showing of revenue versus cost. Of the 12 applications processed during 1963, the Commission found that the public convenience and necessity of the affected areas would not be adequately served without agency service in 2 instances and accordingly denied authority to discontinue agency service at Martin and Montrose* Authority was granted to discontinue agency service at Ambrose, Canon, Louvale, Meansville, Mineral Bluff, Naylor, Porterdale and Willacoochee. There were two applications filed during the year seeking authority to establish dual agency operations under a single agent. Upon showing at public hearings that the proposed dualized services would adequately service the public, the Commission permitted the Atlantic Coast Line to dualize its agency at Saffold with its agency at Gordon, Alabama, and permitted the Central of Georgia Railway Company to dualize its agencies at Rossville and Chickamauga. Also related to the Southern Railway effectuation of operational control over the Central of Georgia Railway and the Georgia & Florida Railway, was its consolidation of agencies of those lines with agencies of other Southern Railway System affiliates in towns where agencies were maintained by two or more of such railroads. Most of these consolida tions were effectuated with no adverse effect upon the patrons of the railroad, but there was complaint filed by a number of citizens of the Adel area charging inadequacy of service rendered to patrons of the Georgia & Florida Railway by the consolidated Georgia Southern & Florida Railway-Georgia & Florida Railway freight agency at Adel. Following public hearing on the complaint, at which hearing the only public appearances were parties supporting the consolidation, the Commission found that the transfer of agency functions of the Georgia & Florida Railway at Adel for the short distance involved and the assignment of the duties of that office to an agent of an allied railroad who has the authority and adequate time to perform those duties, had resulted in no diminution in volume, character or adequacy of agency service rendered to patrons of the Georgia & Florida Railway at Adel, and in the light of that fact and of the support of the City of Adel of the control of the Georgia & Florida Railway by the Southern Railway System and the contention of the principal shippers at Adel that the consolidation would improve their agency services, the Commission dismissed the com plaint. NEW RAILROAD CONSTRUCTION As reviewed in last year's report, there was filed with the Interstate Commerce Commission on November 16, 1962, application by the Chattahoochee Industrial Railroad seeking a certificate of public con venience and necessity authorizing the construction of 19*2 miles of main line railroad in Early County to serve a large multimillion dollar paper mill at Cedar Springs. In recognition of the importance of this new industry to the area of Georgia and the need of that industry for - 38 - these railroad facilities, the Commission actively supported the proposed new construction. Early this year an order was issued by the Interstate Commerce Commission authorizing such construction, but that order con tained restrictive provisions which would severely hamper the construction and operation of the line* The Commission supported the Chattahoochee Industrial Railroad in its objection to those restrictions and the Inter state Commerce Commission approved the removal of those limitations. The line was completed and went into operation on July 8* WESTERN & ATLANTIC RAILROAD The annual report of the lessee of the Western & Atlantic Railroad for the calendar year 1963 shows for the net expenditures charged to the accounting classification "Additions and Betterments" by classes of railroad property, the following amounts: Improved Track Materials ,*,,* $ 9*05572 Land for Transportation Purposes 101,85 Bridges, Trestles and Culverts 5*791*9^ Yard Tracks and Sidings ,*,,* 86,902,96 Station and Office Buildings ,**, 20,217*^-0 Roadway Buildings ,,,.,**** 9^*53 Communication Systems ,*,,**, 100,62 Signals and Interlockers *., 325*78 Grade Crossings 1^6,33 The above net additions reported are after deduction for value of property replaced during the year and total $122,737*13* The net capital expenditures made by the lessee for additions and improvements to the Western & Atlantic Railroad from the beginning of the lease in 1919 through December 31* 1963* amount to $8,176,932* During the year a Legislative Committee conducted an investi gation of the State*s leased property, including that of the Western & Atlantic Railroad, This State Leased Properties Study Committee not only reviewed the record pertaining to the operation of the railroad by the lessee, but made a survey of the property on the entire line between Atlanta, Georgia, and Chattanooga, Tennessee, Tie Committee found the road to be in good condition but was understandably concerned over the reported encroachments on this railroad property and the lack of con tinuing supervision and promotion of the property, A comprehensive report was issued by this Committee concerning the need for continuing administrative supervision of the railroad property to supplement the supervision by the Commission of the operation by the lessee over the property, with the Committee's report recommending an expanded Properties Commission to provide such supervision for this and other State properties. The Legislative Committee engaged the services of an engineering consultant - 39 - of national repute to conduct a survey of the State*s railroad properties, including the determination of factors affecting the leasehold value of the railroad* Representatives of the Public Service Commission cooperated fully with both the Legislative Committee and the consultant engineers in these tasks and participated in the preparation of the reports of both groups. PARTICIPATION IN INTERSTATE TRANSPORTATION CASES In April there was brought to the attention of the Commission the need for equalization of railroad rates on certain grain products to the South Atlantic ports, including the Georgia Port of Savannah the existing rates then heavily favoring the Gulf ports over the South Atlantic ports. After reviewing the situation and determining that equalization of these rates was necessary to permit participation by the Port of Savannah in the large export movements of this commodity, representatives of this Commission joined with representatives of the Commissions of the States of North and South Carolina and sought the necessary adjustment in rates. These negotiations were fruitful and later in the year interested railroads published reduced rates which removed much of the discrimination against the Georgia port. Efforts are continuing to assure the ability of the Port of Savannah to compete on movements of these and other commodities through this port so far as concerns railroad rate relationships. This Commission, together with the other Southern State Com missions and the Southern Governors1 Conference, continued during the year participation in proceedings involving reduced railroad rates on grain shipped in multiple car lots of not less than ^-50 tons. In last year*s report there was pointed out the fact that the application of the rates was enjoined pending further review by the Supreme Court. Early this year the Supreme Court declined to overturn the reduced rates, thus supporting the suspension procedure of the Interstate Commerce Coxamission and permitting the reduced rates to become effective with the attendant great benefit to the grain shippers and users of the South. Unfortunately, however, this decision of the Supreme Court involved only procedural matters and the rates were again attacked on their merits by a group of opposing motor carrier interests. Suit was filed by those interests in the Federal Court in the Southern District of Ohio and this Commission has joined with the other Southern State Commissions and the Southern Governors* Conference in supporting the retention of these reduced rates. During the proceedings before the Interstate Commerce Commission and the courts involving the reduced multiple car grain rates, the princi pal proponent railroad had repeatedly promised to make effective, when the multiple car rates were finally established, single car rates on grain on a level 20 per cent higher than the multiple car rates. Early in the year the single car rates were published, which immediately drew opposition from the same elements that opposed the multiple car rates. This Commission joined with the other Southern State Commissions and the Southern Governors* Conference in opposing the petition for suspension of these single car grain rates. These efforts were successful and these reduced single car rates have provided another benefit to the Southern shippers and consumers of grain and grain products. - 10 - There was reviewed in last year's report petition of the Louisville and Nashville Railroad Company in ICC Finance Dockets Nos* 21755 and 21892 (both involving proposed control b y other railroads of the Chicago & Eastern Illinois Railroad Company) seeking as a condition of approval of the application in either docket that the Interstate Commerce Commission require sale to the Louisville and Nashville Rail road Company of the Chicago-Evansville line of the Chicago & Eastern Illinois Railroad. Although representatives of this Commission appeared at the hearing in support of the Louisville and Nashville Railroad and emphasized to the Commission the interest and concern of the State of Georgia in the maintenance of this important connecting link between Georgia and the Midwest, the Interstate Commerce Commission b y proposed order served September 26, 1963* recommended denial of the petition of the Louisville and Nashville Railroad Company and recommended approval of control of the entire Chicago & Eastern Illinois Railroad Company by other parties. It is anticipated that numerous objections will be filed to this recommended order, with such exceptions now due early in 196^. There was summarized in last year's report the application of three Southern Railway subsidiaries, the Carolina and Northwestern Rail way Company, Live Oak, Perry and Gulf Railroad Company and South Georgia Railway Company, for authority to acquire control of the Georgia & Florida Railroad. The Interstate Commerce Commission eventually approved this application this year but there was considerable difficulty in reaching agreement between the railroad management and the labor organizations involved in this control application and for a time it appeared that no agreement could be made and that the line would be abandoned. In fact, the situation deteriorated to the point where the Federal Court having jurisdiction over the bankrupt Georgia & Florida Railroad ordered liquidation of the railroad properties. Following extensive negotiations, however, an agreement was reached between labor and management which permitted the continued operation of these valuable railroad facilities. There was also reviewed in last year's report the controversy surrounding the provision of railroad sexvice to a new steam generating plant of the Georgia Power Company located on Lake Sinclair near Milledgeville, Georgia. The two railroads involved - the Georgia Railroad and the Central of Georgia Railway - after contesting through the Inter state Commerce Commission and the courts the rights of each other to provide this needed service finally reached an agreement whereby both would provide the service and share the cost of operation over a joint facility. This is the type of arrangement which this Commission had suggested from the beginning and it is gratifying to see these carriers finally agree to provide this needed service in which is obviously the most economical and efficient manner. For the last three years there has been included in this section of the Commission's annual report discussion of the proposal of the Atlantic Coast Line Railroad and the Seaboard Air Line Railroad to merge their properties in the six Southern States of Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia. An examiner's report was served on August 2k , 1962, recommending approval of the proposed merger and this Commission, together with a number of other protestants, filed exceptions to the proposed order attacking the find ings made therein. Following more than a full year of deliberation, the Interstate Commerce Commission on December 2 of this year issued a further order upholding the report of its examiner and authorizing the - kl - merger of these two large railroads. Undoubtedly there will "be petitions for reconsideration of this latest order and it is probable that any final approval b y the Interstate Commerce Commission will be taken to the courts for review. This Commission had sought as a minimum the addition of protective conditions to insure the continued operation of the Georgia carriers threatened with drastically adverse effects b y the proposed merger but both the examiner and the Interstate Commerce Com mission declined to require those safeguards* For many years the City of Milledgeville has desired changes in operations of the Central of Georgia Railway and the Georgia Railroad in and about that city to eliminate prolonged blocking of important streets in the business district and eliminate the hazards attendant with such operations along and across those streets* In February the two carriers filed a .Joint application with the Interstate Commerce Commission seeking to acquire trackage rights over certain tracks of each other in the area which would permit improvement of the situation without interference of railroad service to the State Hospital and adjoining industries. This Commission, finding no prospect of reasonable objection to the proposed transaction and considering the proposed oper ation a substantial improvement in traffic conditions in the Milledgeville area, urged the Interstate Commerce Commission to approve the application. Such approval was promptly forthcoming and the operations of these e a r n ers in the Milledgeville area are now better suited to the traffic con ditions in that area. The Bowdon Railway Company, Inc., which operates a distance of 12 miles in Carroll County between Bowdon Junction and Bowdon, has been in a continually worsening financial situation for several years. This year the lack of revenues forced the applicant to permit the con dition of its tracks, roadbed and locomotive to seriously deteriorate until the point was reached where continued operation was economically unfeasible. Contending that the present and prospective traffic did not return sufficient revenues to justify the almost complete renovation of the facilities necessary for continued operation, the Bowdon Railway Company, Inc,, on November 6 filed an application with the Interstate Commerce Commission for authority to discontinue operation and abandon and dismantle the entire line* In view of the fact that the applicant s northern terminus, Bowdon Junction, is served b y the Central of Georgia Railway Company and both that point and the applicants southern terminus, Bowdon, are" served on a daily basis b y a regular route motor common carrier of general commodities (in addition to being served b y many irregular route and specialized motor common carriers), this Commission interposed no opposition to the proposed discontinuance of service. There continues before the Interstate Commerce Commission the fight of the Southern railroads, supported by this Commission, the other Southern State Commissions and the Southern Governors1 Conference, to prevent the Northern railroads from securing an unequal share of the revenues on railroad traffic moving between the South and the North. As has been set forth in previous annual reports, approval b y the Inter state Commerce Commission of the petition of the Northern railroads could drain as much as $25 million per year from the Southern carriers the attendant prospect to the Southern shipper of either increase in railroad rates or reduction in railroad services, or both. On July IT of this year, the examiners in this proceeding issued a proposed report and order granting the Northern railroads an approximate 10 per cent increase m - k2 - their divisional factors -which, while not as great an impact as the original proposal, would still cost the Southern carriers in excess of $10 million per year. This Commission joined the other Southern protes tants in filing exceptions to this recommended report and order, pointing out the fallacies of requiring the Southern shippers to subsidize their counterparts in the North* It is anticipated that oral argument will he held next year in this proceeding, at which this Commission proposes to appear and continue to oppose this unjustified diversion of revenues from the Southern carriers* - * UTILITY REGULATION INTRODUCTION At the close of the calendar year 1963* there were under .jurisdiction of the Public Service Commission the following number of public utilities: ELECTRIC..... *..................... 2 NATURAL GAS..... ................... 6 TELEPHONE (including h cooperatives)5& TELEGRAPH........................... 1 TRANSIT............................. 3 During 1963j utilities were faced with the problem of keeping pace with the expansion and development taking place throughout the entire state and elaborate plans were made for the future demands anticipated in order to render adequate and satisfactory service. As evidenced later in this report, these public utili ties programed a record high construction budget of some $180,000,000. We have observed this expanding population and economic growth in our state and it is indeed gratifying to note that in the main the greatly expanded need for utility services has been met. The Commission has a qualified technical staff that is available to conduct appropriate surveys on extension of facilities, the character of service being rendered as well as to verify the accuracy of meters measuring the commodity purchased. This staff must handle many and varied problems in the furtherance of the Commission's policy to insure the rate payer of the best possible service at the most reasonable rates commensurate with financial integrity of the utility. The Commission is pleased to note again a decrease in the total number of complaints processed in 1963. -As a barometer of service to the public, this indicates that more citizens are receiving adequate service or at least are being properly handled by the utilities than has been the case in recent years. There is, of course, a certain number of complaints that can always be expected, but as long as the overall trend is downward, especially in view of the rising state population, it can certainly be voiced that improvements are continuously being made. Let us digress for a moment and consider the recorded pattern of complaints brought before the Commission during the past decade. In reviewing the data for the past eight or nine years, (Chart "A") it becomes apparent that some important fluctuations in the status of public satis faction with utility service have occurred. In the late fifties and early sixties complaints soared from their previous levels. The specific reason for these jumps cannot be singled out, but there are a few major contributing factors which can be observed. First, during this period, there were several increases in consumer cost of natural gas occasioned by the pass-on of increased gas costs from the pipeline suppliers to the distribution companies. Although information was made public on the pass-on of costs, this did little to sooth the ire of many customers. Second, both the electric and gas companies permitted a rather high percentage of estimated bills to be rendered their customers, and this alone accounted for approximately 25$ of the increase in complaints. And third, it was also during this period that the Southern Bell Telephone and Telegraph Company established the Metropolitan Calling Service for the various Atlanta exchanges. The establishment of this service was inadequate in several localities to handle the heavy calling traffic, with the result that complaints to the Commission were greatly stepped up. For the past three years, considerable effort has been expended both by the Utilities and the Commission to bring about an improvement in the above mentioned conditions. Although progress has been made, as evidenced by the reduction in registered complaints, much remains to be done. The rapid growth of state population and associated utility growth will make even more demands upon the Commission. As reported in previous years, the Commission has actively participated in work of committees of both regional and national scope in cooperation with the National Association of Railroad and Utilities Commissioners. This work has resulted in the establishment of lower intrastate telephone rates which is covered more fully later in this report. Further, an adequate training program has been established on a national basis in order to assist all state regulatory agencies in attracting young staff members as well as to increase the speed of training to make such staff member productive with the least amount of time involved. Experience gained by members of the Commission's staff who have attended these training programs, and at their own expense, has borne out the need and wisdom of the training program. In addition to work performed on a national scope, members of our Com mission's staff participate in "Workshops" conducted in various sections of the state by the Georgia Telephone Association. This promotes a better understanding between the industry and the Commission as well as enabling the staff to learn more about the communications industry as the various manufacturers present and demonstrate new equipment. The staff of the Commission must constantly keep abreast of developments in all of the electric, gas, communications and trans portation utility fields in order to be proficient in the many duties assigned. Personnel are encouraged to improve their education by special cotirses and to obtain registration in engineering, accounting and legal professions. INVESTMENT TAX CREDIT The Investment Tax Credit was originally enacted as Section II of the Revenue Act of 1962. As originally proposed, this credit has been a graduated scale of percentages, depending on the proportions of construction expenditures to depreciation deductions for income tax purposes during the year in which the construction occurred. This was changed by the House Ways and Means Committee to a flat 7 per cent income tax credit for all taxpayers except utilities and a credit of 3 percent for utilities. These latter percentages were retained by the Senate Committee and are effective in the bill as signed. The Senate Committee did initiate one change in the bill which profound ly influenced the basic nature of the tax credit. This change provided that for tax purposes, the investment credit would be treated as a reduction on the basis for the property of the purpose of depreciation allowances. Thus, the income tax credit was changed from a simple tax reduction, unassociated with depreciation, to what amounts to another form of accelerated depreciation. Regulatory commissions throughout the nation are split on the proper treatment of the investment tax credit, and understandably so in view of different opinions from accounting sources, legal consultants, and, the utilities themselves About one-third of the states have adopted the policy of "normalization" for rate and accounting purposes, one-third require the "flow through" treatment with the remaining one-third undecided on a satisfactory policy. -*9~ CHART A j ..... I ... jj^ ; I I I[I ; s ! k I '5 4 '5 5 '56 '57 '58 '5 9 '6 0 '61 '6 2 '63 TOTAL OF ALL UT I L I T Y C O M P L A I N T S To summarize briefly, this Commission in its orders of January 16, 19^3^ prescribed the accounting treatment (100$ Deferred Normalization) to be afforded the "investment credit" by the Utilities under its jurisdiction. Namely, it held that such credits in their entirety be segregated and amortized as credits to operating income over the service life of the property which gave rise to the credits. A special balance sheet account was established to reflect the full amount of the "investment credit" and a special income account m s set up to receive this credit for amortization over the life of the property. This method of accounting for the "investment credit" appeared to be in meeting with findings for same by the Accounting Principles Board of American Institute of Certified Public Accountants. The Commission further prescribed that for rate making pur poses, any unamortized portion of the "investment credit" would be deducted from the rate base of any utility so involved. ELECTRIC UTILITIES GEORGIA POUER COMPANY No rate changes occurred during the year 19&3> however, a number of informal conferences were scheduled between the Commission and officials of the company for the purpose of working out, on mutually satisfactory basis, certain difficult service, accounting and tariff problems. On February 21, 19^3 Georgia Power Company filed an application with the Commission requesting authority to issue and sell $30,000,000 of principal amount of First Mortgage Bonds, Series due 1993, also authority to issue and sell 70,000 shares of its Preferred Stock and 110,000 shares of its Common Stock. The application set forth that the com pany proposed to make capital expenditures from January 1, 19^3 to December 31> 1963 in an amount estimated to exceed $63,000,000 for property additions and that in order to provide a portion of the funds required, the proposed issuance of securities m s necessary. After careful consideration of the matter, it appeared that the proposed additions to generating plants and other facilities of the company were necessary for adequate system capacity to render satisfactory service and that a security issue as applied for was required to finance the projects. The Commission approved the application on March 27th and required that a report be filed indicating the final cost of capital. During the year, the company reported payments under the "Wiring Plan" previously approved by the Commission amounted to $5,84A,025 and this capital expenditure produced $1,780,250 in additional revenue or a ratio of 3*28 to 1. Since this plan could be subject to abuse and might ultimately affect the rate payer adversely, the staff makes periodic inspection of the records and installa tions to assure compliance with the rules and regulations as approved by the Commission. On May 31, 1963, the Commission approved a lease agreement between Georgia Power Company and Plant Telephone and Power Company, Inc. This agreement provides for Georgia Power Company to lease the electric distribution facilities of the Plant Telephone and Power Company, Inc. serving the municipalities of Warwick and Oakfield, as well as certain adjacent and rural areas in Worth County. The terms of the lease allows the Georgia Power Company to enjoy all rights and benefits from the use of this system for a consideration of $958.33 per month with an option to purchase at the end of 25 years. The cost of all operations, mainte nance, advalorem and franchise taxes, and improvements of the system shall be borne by the Georgia Power Company during the tenure of the agreement. Since Georgia Power Company rates are lower, together with the greater economies of operation and increased dependability of service, the Commission was of the opinxoi. that consummation of lease agreement would be in the best public interest and permitted the lease agreement to become effective. SAVANNAH ELECTRIC AND POWER COMPANY There were no formal filings of rates or security matters by this utility during the year. Construction expenditures of $3*313*100 for additional generating, transmission, distribution facilities and a new headquarters building were financed from funds generated and by short term bank loans. On July 3rd, the company filed a complete set of rules and regulations for consideration by the Commission. This document was carefully analyzed by the Commission's staff and after certain minor changes were made, the Commission accepted said document subject to complaint and further order. As previously reported last year, the company received approval for expenditure of funds for promotional allowances to induce customers to install adequate wiring for additional electrical appliances to include "all electric" homes for new and existing residences and apartments. The Commission required quarterly reports be filed in order that a close vigilance be maintained on expenses and^ additional revenue estimated to be derived from the program. For the year, the company made payments totaling $2+3*930 resulting in the sale of 5,667*060 kilowatt-hours and added $33,108 in revenue. This means that for each dollar spent, a little more than $2.00 in new revenue was received. The advan tages of such a program results in a greater convenience to the customer because of adequate wiring on the premises and the reduction in fire losses usually caused by overloaded electrical systems. TELEPHONE UTILITIES During 1963, the Commission issued forty-two orders granting telephone companies authority to increase rates, to borrow funds from REA and private sources, and to issue additional securities. The following tabulation shows the type and number of decisions rendered by the Commission: Type of Order Number of Orders Rate matters 10 Loan and Security matters 12 Telephone Certificates of Public Convenience and Necessity 1 Amendments 0 Toll lines 2 Rule Nisi 2 Acquisitions 1 Miscellaneous 3 Total ~%2 During the year, Southern Bell Telephone and Telegraph Company filed some 165 revised General and Local Exchange Tariff sheets setting forth rates for -47- new equipment and services, eliminating four-party service in certain urban areas and establishment of locality rate areas for several exchange areas. Two other significant tariff filings were made, namely: 1, Eliminated the installation charges for ''spring cords" in the amount of $2 .5 0 each, thus saving subscribers some $285,000 annually. 2. The new tariff on intrastate long distance charges saved the rate payers $71*000 annually on long distance station-to-station calls made between 9 P.M. and 4:30 A.M. The maximum charge for calls between any two points inGeorgia for three minutes station-to-station was reduced from 85^ to 55^ &ue the new tariff approved by the Commission on January 30 and was made effective April 1. The total reductions of all tariff changes amounted to nearly $360,000 on an annual basis. Tabulated below is the revised Georgia Intrastate Rate Table: 1 MILEAGE * 0- 8 9- 13 l4- 18 19- 24 25- 30 . RATES STATION TO STATION PERSON TO PEIS O N Paid ] Collect Day, Eight & Sun. and After 9 Hi Paid and Collect Day (Exc Sun) M g i t & a m Laffer 9 PM Initial .10-4m .1 1 -3m .20-3m 25-3m .30-3m Overtime .05-2m .05-2m .07-lm .08-lm .10-lm Amt. to be added to charges Computed on "Paid Basis .15 .10 .10 .05 . 00 Ini 3 Mins .25 .30 35 .4o .45 A d d 'l Min Init. Erst After 3 3 3 Mins .08 .05 .25 .10 .05 30 .12 .07 35 .13 .08 .4o .15 .10 45 A d d 'l i in Erst After 3 3 .08 .05 .10 .05 .12 .07 .13 .08 15 .10 Paid and Collect Day (Exc Sun) Night & Sun 3 Add'l 3 A d d 'l yiins Min Mins Min After 9 Bl 0 A3d'l Mins Min 31- 35 .12 35 43- 56 .1*0 .13 .4o 57- 64 .50 .17 .4o 65- 80 55 -18 ,4o 81-100 .60 .20 M .12 35 .12 .50 .17 .12 .50 .17 .12 .13 . 4 0 .13 .65 .22 .13 .60 .20 .13 .13 .4o .13 .75 .25 17 .60 .20 .13 13 . 4 0 .13 .85 .28 .18 .65 .22 .13 .15 .40 .13 .90 .30 .20 .70 23 .15 101-124 .65 .22 .50 125-148 .70 .23 .50 149-172 .75 .25 .50 .17 .45 .15 .95 .32 .22 75 25 .17 .17 M .15 1.0 0 33 .23 .75 .25 .17 .17 .45 .15 1 . 1 0 .37 25 .80 .27 .17 173-198 .80 .27 .55 199-226 .85 .28 .60 227-252 .90 .30 .65 253-280 .95 .32 .70 .18 .50 .17 1 . 1 5 .38 .27 Lf\ CO .28 .18 .20 .50 .17 1.2 0 .40 .28 . 9 0 .30 .20 .22 .50 .17 1.2 5 .42 .30 . 9 5 .32 .22 .23 . 5 0 .17 1.3 0 .43 .32 1.00 33 .23 281-310 10 0 .33 .70 3 1 1 -31*0 1 0 5 .35 .75 31*1-37 0 n o .37 .80 371-400 3.15 .38 .85 .23 .50 .17 l.4o .47 .33 1.0 5 *35 23 25 .50 .17 1.45 .48 35 1.10 *3? .25 .27 .55 .18 1.5 0 . 5 0 37 1 . 1 5 .38 .27 .28 .55 .18 1.6 0 53 . 3 8 1.2 5 .42 .28 *DETERMINED IN ACCORDANCE WITH V-H SYSTEM... Georgia, Intrastate, April 1, 19&3 -48- On April 3, lower station-to-station interstate rates became effective for long distance calls placed between any two points from ^ P.M. to 4:30 A.M. in the continental United States and, the maximum charge for a three minute stationto-station call is $1.00. The reduced rates are designed to encourage telephone users to take advantage of technological improvements in telephone operations introduced in recent years, much of which is engineered for peak daytime traffic. Based upon 1962 traffic volumes, it is estimated the reduction in inter and intra state rates will save the Georgia telephone users more than one-half million dollars annually. LOAN AND SECURITY MATTERS The Commission allowed seven independent telephone companies, during 1963, to borrow $4,621,000 from the Rural Electrification Administration. Accord ing to the applicants, the funds are to be used to construct additional facilities in order to serve new subscribers. Included in this will be some four hundred miles of line, new central office equipment and buildings, and extended area ser vice (toll free) between certain exchanges. Further, plant will be added to provice one, two and four-party service for new and old subscribers. In addition, the Commission allowed several independent companies to issue and sell bonds and Common Stock, and to reacquire outstanding Common Stock after those companies had shown that this was necessary and in the public interest. Cairo Telephone Company - Issue and sell $485,000 principal amount of 5r$ First Mortgage Bonds to mature in the years 1964 and 1965. Thomaston Telephone Company - Issue and sell $1,250,000 of 5$ First Mortgage Bonds, series 1963 to mature in the years 1964 through 1988; to issue 100 shares of Common Stock,$100 par value; to purchase and cancel 250 2/3 shares of outstanding Common Stock. Georgia Telephone Corporation - To borrow from Stromberg-Carlson $60,000 at Ofo interest to be repaid in equal monthly installments over a period of twenty years from the date of the finaJ. note. Comer Telephone Company - To issue and sell 150 shares of$100 par value Common Stock and to acquire control of Union Point Telephone Company by purchasing 380 shares of Common Stock for a price of $38,000. CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY The problem of fixing certificated boundary lines has been one of much concern to the Commission ever since the enactment of legislation in 1958 which authorized Certificates of Public Convenience and Necessity. While it is the desire of the Commission to see that each new applicant for service receive as nearly as practicable the quality and type from the area he requests, that desire must be tempered with the knowledge that the Commission must protect the interest of a.11 subscribers presently served by such company* In practically all cases, county residents desire service to the county seat which appears reasonable and proper. One such case involved the Walker County Telephone Company. On July 17> 1963, the Commission issued a Rule Nisi against Walker County Telephone Company, Inc. to show cause why the southern certificated boundary line of the LaFayette exchange should not be redesignated to as to permit the Trion Telephone Company to extend facilities from the Trion exchange in Chattooga County to the Halls Valley Community in the southern part of Walker County. This area had been certificated on November 25, 1963 to Walker County Telephone Company on the basis that facilities would be constructed to serve this area with telephone ser vice within twelve months from the date of the order and unless extended by further order of the Commission, would be limited to the extent of facilities constructed as of that date plus an area of one mile in any direction from the constructed facilities. No application for extension of time had been received by the Commis sion since the issuance of the certificate and applicants of Halls Valley Community were now desirous of being connected to the Trion exchange of Trion Telephone Company* This matter m s heard before the Commission on September 11, 1963* Mr* E. P. Burney, President, and Mr. A. 0. Perry, Vice President of Walker County, appeared and gave testimony relative to plans to provide service to all residents of the County desiring telephone service. According to testimony at the hearing, adequate capital funds were then available to procure necessary materials and to accomplish the required construction. It was further brought out that the Company would be able to provide service to all applicants in the Halls Valley Community within six weeks from October 20. A witness appearing on behalf of the applicants stated that service from the LaFayette exchange would be of little value to the Halls Valley Community since the majority of homeowners worked in Trion and practically all calls would be in the Trion area. Further, the applicants would be willing to wait until the middle of 1964 if service could be obtained from Trion at that time. The Vice President of Trion appeared at the hearing and indicated that Trion would be willing to provide service to the applicants, but it would be about July of 1964 before service could be established. However, he stated that Trion was not looking for any additional territory beyond the present northern certificated boundary line of the Trion exchange. After full and careful consideration of the matter, it was the opinion of the Commission that no change should be made in the certificated area of Walker County. It was further the opinion of the Commission that the area in the southern part of the county as certificated, should be extended for a period of twelve months. As was reported in 1962, the Commission took appropriate legal action to bring penalty suit against Blue Ridge Telephone Company for failing to comply with certain provisions of Docket Number l4j6-U and for failing to make refunds to subscribers for overcharges in telephone service for the period July 1, 1962 through December 1, 1962. The Attorney General was requested to pursue the matter against the Company and did so on January 29, 1963, by making a demand to Company officials by registered letter to cease and desist charging subscribers the rates prescribed in Docket No* 1496-U until the Company had met certain conditions contained in that order and to make refunds for the period in question. In response to the Attorney General's demands, the Company, b y letter dated January 1, 1963, stated that it had met the requirements of Docket No. 1496-U and that refunds for overcharges would be made by credits to subscribers' bills beginning March 1, 19634 It was further represented that refunds would be made over a period covering five to twelve months or such period as the Commission directed. -50- After careful consideration of the facts contained in the letters, the Commission concluded that Blue Ridge had complied with the provisions of Docket No. 1 A96-U and ordered that refunds be made over a ten month period beginning March 1, 1963 LOAN AND SECURITY MATTERS TELEPHONE COMPANIES Telephone Company Pineland Telephone Co-op., Inc. Citizens Telephone Company Cairo Telephone Company Thomaston Telephone Company Georgia Telephone Corporation Progressive Rural Telephone, Inc. Comer Telephone Company, Inc. Gray-Haddock Telephone Company, Inc. Sikes Telephone Company Planters Rural Telephone Co-op., Inc. Date of Order Docket Number Jan. 16 , 1963 Feb. 13, 1963 Mar. 1963 Mar. h 1963 Apr. 18, 1963 July 12 , 1963 I76I-U 1762-U 1767-U 1765-u 1772-U 1 7 1 8 -U Sept. If? 1963 1784-U Nov. 13? 1963 1803-U Nov. 19? 1963 CO Dec. 1963 CO rH Dec. 1963 1793-U 1 8 1 7 -U 1816-u V TELEPHONE CERTIFICATES Issued in 1963 Date of Order Blue Ridge Telephone Co. Camden Tel. & Tel. Co., Inc. Camden Tel. & Tel. Co., Inc. Camden Tel. & Tel. Co., Inc. Georgia Telephone Corp. Comer Telephone Co. 2/ 1 / 6 3 3/1/63 3/1/63 3/1/63 V 18/63 V 18/63 General Telephone Co. Georgia Telephone Corp. 4/18/63 5/1/63 Coastal Utilities, Inc. Seminole Telephone Co., Inc. 5/29/63 7/12/63 Seminole Telephone Co., Inc. 7/17/63 Walker County Telephone Co. 7/17/63 Comer Telephone Co. II/I3/63 Gray-Haddock Telephone Co. H / 19/63 North East Florida Tel. Co., Inc. II/19/63 Gray-Haddock Telephone Co. II/19/63 Standard Telephone Co. 12/4/63 Docket Rule New Toll Number Amend. Nisi Acq. Exch. Lines 1608-U 94l-U X 9^2-U X 9^3-u X I77I-U Certificate 1773- u X 1774- U X 1776- u X 1777- U X 1781- U Certificate 1782-u X 1790-u X 1 8 0 3 -U X 179^-U Certificate 1802-U Certificate 1795-u X I8IO-U X -51- Thomaston Telephone Co. All Telephone Companies MISCELLANEOUS MATTERS 12/18/63 Non-Docket l/16/63 Non-Docket Amendment to the Charter Investment Credit Summarized "below is certain data pertinent to telephone companies showing the number of telephones in 1963 as compared to 1962 1963 1962 Total number independent telephone companies 53 Total number cooperatives in operation ^ Common Battery exchanges 1 Dial exchanges 228 Total Number Exchanges 229 Number of Common Battery stations ^9 Number Dial stations 196,210 Total Number Stations 196,259 Per cent station gain over previous year 8.2$ Number of exchanges in process of conversion to dial 0 Number in process of being established b Number of new exchanges established 3 Total telephone plant in service December 31 $82,208,219 Total plant under construction 1,916,071 55 4 1 225 226 ij-9 181,288 181,337" 9*55$ 0 h 7 $69,072,517 2,3 2 1 , 1 5 8 Number of REA borrowers 37 Total amount ofloans approved by REA as of December 31, 1962 Total amount offundsadvanced by REA as of December 31, 1962 37 $^5,999,000 $3^,071,755 Total amount ofloans approved by REA as of December 31? 1963 Total amount offundsadvanced by REA as of December 31, 1963 $^7>^95,000 $38,023,796 SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY Gross plant in service at December 31, 1963 Plant under construction at December 31, 1963 Number common battery exchanges Number dial exchanges Total number exchanges at December 31, 1963 Total company stations at December 31, 1963 $500,009,158 6,^35,064 5 _________ 135 1^0 1,281,3^-0 Summary of Total Georgia Telephone Operations at December 31, 1963 Total number of telephone companies operating in Georgia Total plant in service Total plant under construction 58 $582,217,377 8,351,135 Total common battery exchanges Total dial exchanges Total number exchanges Total number stations -52- 6 368 37A 1,^-77,599 \ .RIN GGOLD TREN Tdif ^HlPtAMwSM [l a f a y e t t i DALTON T R IO N I SUMMER VILLE ;l h o u n LDAIRSVILLe I SB^CWORlN ; mm k e n n e sav^ K |T1l|oSlraTs* `n\ |I POW DEfj S P G S ^ 'lj R IC A A U S TE LL taffiffiUGLAj GAS FA C ILITIES IN GEORGIA G AIN ESV ILLE TOCCOA A V A L O ft" M ARTIN V LA VO N IA B BO W E R S V ILLE b C AN N O N fX ROYSTON^ A HARTWELL X ' Springs .B UFORD COMMERCE EFFE^fON W ,^L S V IL L E \ \ \ Vv'''*COMER ua'm WINDERt 9v \' j m k COLBERT MBM \ j > * daculaI iART ASVtui' jff SK IN SVILLE g r ' M O N R O E EMONIA <*W>LNUT GROVE ELBE;rr PREPARED BY ATLANTA GAS LIGHT COMPANY NOVEMBER, 1963 SOUTHERN NATURAL GAS COMPANY TRANSCONTINENTAL GAS PIPE LINE CORP. SOUTH GEORGIA NATURAL GAS COMPANY - DISTRIBUTION COMPANY GAS PIPE LINES - PROPOSED NATURAL GAS LINES ATLANTA GAS LIGHT COMPANY SERVICE PRESENTLY SERVED SOUTHEAST GEORGIA PROJECT AREAS CO VING TO N PORTERDALE MADISON THOMSON WARRENTON lR TIN EZ AUGUSTA MONTICELLO IJAC KS O N fE A T O N T O N SPARTA LAGRANGE M lL N E ff B A R N E S V II ||.TH WRENS LO U ISVILLE W aynesboro 'W S T P O IN T M A N C H E S T WOODLAND talbo tto n COLUMBUS F T . BENN1NG [Lu m p k in .R IC H LA N D DAWSON FT. V A LL E Y !AM ERICUS M ILLEN F:RDARNYCH :f f e r s o n v il i (WARNiR: (DANVILLE \ jiiiltI L L E kSWAlNSBORO 'tfO N TR O S L D U B LIN V... .jDUDLEY PERRY CHESTER; jB jo e x TER COCHRAN .S Pre NTZ SPERTON * CAOW ELL,*' V pS Y L V A N li GUYTON ^ S P R IN G F IE L D s J tR IN C O N H A W K IN S V IL I^ if'' GLRWOC ALAMOl^*"' I astm an fWT> VERNON hele^*ae'\ ^filLAN LUMBERS CITY m i s le h u r st .LYONS E ID S V IL L E SAVANNAH' ":||G L E N N V IL L E ^WNESVILLC XLEY JLUOOWCl o ^jEVsupj/rv -J SYLVESTER TIFTO N fPA TTE RS O N LACKSHEAR HOM ASVILLE GAS UTILITIES In March of 1963, the Federal Power Commission issued Order and Opinion Number 379 This Opinion, subsequently amended by 379a, settled Southern Natural Gas Company's application for a rate increase under Dockets G-20509 and HP 60-15. By ordering Southern Natural to make refunds for prior sales of natural gas, this Opinion affected four jurisdictional Companies of this Commission. The final disposition of these refunds by Atlanta Gas Light Company, Gas Light Company of Columbus, South Atlantic Gas Company and Mid-Georgia Natural Gas Company will be explained in the discussion for each company. ATLANTA GAS LIGHT COMPANY REFUNDS On March 25, 19&3> Atlanta Gas Light Company filed an application with the Commission in which it requested authority to pass along to its customers some $2,000,000 in gas refunds received from Transcontinental Pipeline Company and Southern Natural Gas Company. In its application, the Company proposed to apportion refunds beginning with its billing cycle on or about April 1 , 19^3, to customers on the following basis: Residential customers would receive a credit on their current bill by multiplying the customer's average August and November, 1962 bills by a unit credit in therms. This credit would be calculated by dividing the total amount of the residential refund by one-half of the sum of the August and November therm sales in this category. The refunds to commercial customers would be handled in a similar manner. Refunds in all other classifications would be handled on an individual customer basis. The following analysis shows the amount of refunds due each class of customer: CLASS RATE AMOUNT Residential Residential General Service General Service Governmental Optional Optional Interruptible Firm Total /SN-1n /SN-2 n ^TN-5 SN-11 /SN-8 n vt n -6 ' SN-9 $1 ,3^1,16 0 3kQ,kho 35,500 125,500 lk9,to) $ 2 ,000,00c On April b , 1963, the Commission approved Atlanta Gas Light Company's plan for making refunds. In addition, the Company was directed to file revised rates in order to reflect the reduction in cost of natural gas from its supplier. The following schedule shows the effect of this revision on general service and residential rates. Residential N-l Therms RATES After Reduction In Cost Of Purchased Gas First 4 Next 11 Next 285 Over 300 -53- $1.50 .11 .08 .06 Before Reduction In Cost Of Purchased Gas $1 . 1 6 .1073 .08^3 .0713 General N-2 First 4 Next 11 Next 16 Next 285 Next 300 Next 58c Over 600 $1.5 0 -0- .12 -0- -0- .08 .065 $1.16 .1073 -0- .0853 .0713 -0- .0673 As a result of additional refunds received during 1963* Atlanta Gas Light reported holding some $2,307*000 subject to refund. In the following schedule, this amount as at December 31* 19&3* Is classified by type of customer: REFUNDS DECEMBER 31, 1963 NATURAL GAS AREA EXCLUDING VALDOSTA Rate Classification Residential General Optional Optional N-l N -2 T N -6 N-8 Interruptible SN-9 Firm Low Cost Hous ing N-ll Total Per Cent 67.058 17.422 0 .l8l 6.094 7.558 1.687 100.006 Amount $1 ,,520,154 394,943 4,103 138,146 171,334 38,243 W f,266,923 Residential General Total SGN-14 SGN-15 Valdosta Area 74.893 25.107 100.000 $ 30,433 10,203 r 40,638 The above amounts were refunded to active customers on the Company's lines during the period November 27 through December 27* 19^3 CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY On December 17* 19^3 the Commission heard an application filed by Atlanta Gas Light Company for a "Distribution System" Certificate of Public Convenience and Necessity to serve a portion of Clark County, Georgia with natural gas. It liras shown at the hearing that the Company could obtain an adequate supply of natural gas and that the proposed system would permit future growth. After careful con sideration of the evidence, it was concluded by the Commission that the Company's application was reasonable and proper, in the public interest and should be granted. As a result of this conclusion, an order granting the Company "Distribution System" Certificate No. 30 and same was issued by the Commission on December 18, 1963. Also heard on December 17* 19^3 V&s an application of Atlanta Gas Light Company for a Certificate of Public Convenience and Necessity to serve a portion of Jackson County with natural gas. At the hearing, it was brought out that the City of Jefferson was performing certain natural gas distribution services in Jackson County without a Certificate of Public Convenience and Necessity. While this was entirely within the law, the City, however, would discontinue gas service in Jackson County upon being served with natural gas by the applicant. It was further brought out at the hearing that the Company could obtain an adequate supply of natural gas and that the capacity of the system would permit future growth. Interventions were made by United Cities as protestant and by J . D. Jewell, Inc. in support of the application. According to the evidence, United Cities has a pipeline running through a portion of Jackson County connecting with Transco1s main line near Bogart, Georgia. While no gas customers had been served from this main line, the Company had, however, constructed a lateral extension to serve J. D. Jewell, Inc. with natural gas. This extension, constructed with funds obtained from J. D. Jewell, Inc. as a contribution in aid of construction and subject to refund, is used solely to provide that Company with natural gas. In order to prevent any mi sunderstanding, the Commission specifically set the boundary line of Atlanta Gas Light's service, in the Western portion of Jackson County, 500 feet from and parallel to the transmission line of United Cities. The Commission allowed one exception to this rule by providing United Cities with a 500 foot corridor, centering on the tap line used to serve J. D. Jewell, Inc. with natural gas. This corridor begins at the tap and ends at the point of connection with the meter at J. D. Jewell, Inc. It appeared that the application was in the public interest, particularly since the standard general service rates for Atlanta would be used throughout the area. These rates reduced the cost of natural gas some 30 par cent. In addition, Atlanta Gas Light Company would have the capacity to serve areas of Jackson County not now being served with natural gas. As a result of these conclusions, the Commission issued an order on December 18, 1963, granting Atlanta Gas Light Company "Distribution System" Certificate Wo. 98. Furthermore, this order allowed the Company to acquire, at a cost of $425,000, the gas facilities owned by the City of Jefferson, Included In this cost is an acquisition adjustment of $111,403, which amount, the Commission ordered to be amortized over a period of 10 years from the date of purchase. SECURITY ISSUES On February 13, 1963, the Commission conducted a hearing on Atlanta Gas Light Company's application for authority to sell $27,000,000 of First Mortgage Bonds due in 1938. The Bonds were to be sold in March, 1963 to a group of under writers represented by The First Boston Corporation and Stone and Webster Securi ties Corporation for resale to the general public. Atlanta Gas Light Company represented that estimated cash proceeds from the sale of the Bonds together with $90,588 of cash to be generated from operations would be used as follows: Redeem 5 l/8$ Series Bonds, due 1982 Redeem 5 l/8$ Series Bonds, due 1985 Payment at or before maturity on September 1, 1963 of First Mortgage Bonds, 3$ Series, due 1963 Payment of notes payable to banks Construction and corporate purposes Total $ 7,749,544 9,34 1, 4.468.000 3 ,500,C0C 2 .032.000 $27,090,588 While the evidence in this matter was under consideration by the Commis sion, Atlanta filed, on February 25, 1963, an amendment to its original application. In this amendment, the Company sought permission to change its method of selling -55- the Bonds from a private sale to a public sale at competitive bidding. Sale of the Bonds, Atlanta Gas Light contended, .would be made to the bidder who offered the Company the most attractive price. After careful consideration of the facts in this case, the Commission, on March 1, 1963, issued an order in which it approved the Company's request to sell the Bonds at competitive bidding. GAS LIGHT COMPANY OF COLUMBUS REFUNDS As a result of the Federal Power Commission's Order and Opinion Number 379 issued in March of 1963, Southern Natural Gas Company refunded to Gas Light Company of Columbus $5 6 1,493. This refund, together with $26,989 in Gas Light Company's liability account at January 1, 1963, brought the total amount of refimds due its customers to $588,452. Of this amount, the Company passed along $460,362 to its customers during 1963. In determining the amount of refunds due residential and Commercial customers, the Company divided the total refunds due customers in these catagories by the total sales in CCF (100 cubic feet). The unit credit so determined, multiplied by the customer's February 11, 1963 consumption in CCF, gave the amount of credit due each customer. Refunds to customers in other classi fications were calculated on an individual basis and applied to each such customer'c bill. On March 27, 1963, and December 26, 1963, Gas Light Company of Columbus filed revised tariffs with the Commission showing the new rates applicable to its customers after giving effect to the reduction in cost of purchased gas from Southern Natural Gas Company. The following schedule shows the rates applicable to each class of customer. GAS LIGHT COMPANY OF COLUMBUS Rates in Effect Net Jan 1 , 1963 Mar 27, 1963 Dec 26, 1963 Schedule A-l, Residential Billing months October to May inclusive: First 400 cubic feet or less per month $ Next 2,600 cubic feet used per mo. per CCF Next 17,000 cubic feet used per mo. per CCF Over 20,000 cubicfeet used per mo. per CCF 1.50 .1177 .0824 .0609 $ l.pO .1148 .0795 .0580 $ 1.50 .1138 .0785 .0570 Billing months June to September inclusive: First 400 cubic feet or less per month Next 2,600 cubic feet used per mo. per CCF Next 17,000 cubicfeet used per mo. per CCF Over 20,000 cubicfeet used per mo. per CCF 1.50 .1177 .0824 .0426 1.50 .1148 .0795 .o4oo 1.50 .1138 .0785 .0390 Schedule A-2, Commercial: First 400 cubic feet or less per month Next 2,600 cubic feet used per mo. per CCF Next 17,000 cubicfeet used per mo. per CCF Over 20,000 cubicfeet used per mo. per CCF 1.50 .1177 .0824 .0609 M .1148 .0795 .0580 1.50 .1138 .0785 .0570 Schedule B-Firm Industrial: Demand Charge: Per 100 cubic feet of maximum hourly rate of use per month 1.96 1.76 1.69 Schedule E Demand Charge: Monthly rate per 1,000 cubic feet for the quantity of natural gas agreed upon as the firm demand per day. Schedule G Demand Charge: Monthly rate per 1,000 cubic feet for the quantity of natural gas agreed upon as the firm demand per day. Schedule H Demand Charge: Per 1,000 cubic feet of billing demand 2.70 2.70 2.70 SOUTH ATLANTIC GAS COMPANY REMINDS 2.43 2.43 2.43 2.34 2.34 2.34 As a result of the Federal Power Commission Order and Opinion No. 379 and 379a, South Atlantic Gas Company received $296,309*80 in gas refunds from Southern Natural Gas Company during 1963* The following schedule shows the amount of gas refunds received during the year; the amount of refunds passed along to South Atlantic Gas Company's customers and the balance of refunds as at December 31> 1963* GAS REFUNDS DECEMBER 31, 1963 Balance January 1, 1963 Refunds received from suppliers : Reduction in cost of purchased gas Cash Refunds during 1963 Refunded during 1963: Residential and small commercial customers, Rates NG-1 and NG-2 Firm gas customer, Rate NG-7 Large commercial customers, Rate NG-6 Public housing customers, Rate NG-4 $ 23,473*09 272,836.71 $125,9^3*71 22,909*'-3 6,249.25 3,455*00 Expenses incurred in handling the refund to customers Balance December 31, 1963 $ 45,178.88 296,309*80 $341,488.68 158,557*39 $l82,931*29 1,978.14 $180,953.15' Residential and Commercial customers received refunds in the form of a credit against their gas bill. In determining the credit, the Company divided total sales in CCF by the total refunds due residential and commercial customers. The -unit credit so determined was applied to each customer's bill on the basis of his consumption in CCF of natural gas during February 1963* Refunds to customers in other classes were determined on the basis of their actual consumption of natural gas. South Atlantic Gas Company reduced its natural gas rates twice during 19 63* These reductions were a pass-on to gas customers of the reduction in cost of gas from Southern Natural Gas Company. The new reduction for residential users amounted to 1C$ per month in the initial rate step. The following schedule shows a comparison of the rates before and after the reduction. -57- SOUTH ATLANTIC GAS COMPANY GENERAL RESIDENTIAL SERVICE First 200 CF or less per month Next 800 CF per month - per CCF Next 2,500 CF per month - per CCF Over 3*500 CF per month - per CCF Hates April 1, 19^3 Aug. 15* i960 1.83 .239 .im .124 1.93 .239 .154 .124 GENERAL COMMERCIAL SERVICE First 200 CF or less per month Next 4,800 CF per month - per CCF Next 95*000 CF per month - per CCF Over 100,000 CF per month - per CCF 2.08 *2tt .164 .124 2.18 .244 .164 124 GENERAL GAS SERVICE (Promotional-space cooling) First 200 CF or less per month Next 800 CF per month - per CCF Next 2,500 CF per month - per CCF Over 3*500 OF per month - per CCF 1.83 .239 .154 .062 1.9 3 .239 .154 .062 PUBLIC HOUSING SERVICE First 200 CF or less per month Next 2,300 CF per month - per CCF Over 2,500 CF per month - per CCF .49 .l66 .124 .52 .166 .124 SECURITY ISSUES On October 31* 19^3* South Atlantic Gas Company filed an application with the Commission requesting authority to issue and sell on a negotiated basis $1,000,000 principal amount of First Mortgage Bonds bearing interest at the rate of 4 'i/k'fo per annum, due September 1, 1988. The Company proposed in this applica tion to issue the Bonds to The Liberty National Bank and Trust Company of Savannah. According to testimony by representatives of the Company, the funds obtained from the Bond issue will be used for construction requirements during the fiscal year ended September 30* 1964, estimated at some $1,200,000. In addition, part of the funds obtained will be used to settle short-term bank loans. The Commission ruled on November 27* 1963 that the sale of additional Bonds fell within the intent of Section 93-4l4 of the 1933 Code of Georgia and was in the public interest. MID-GEORGIA NATURAL GAS COMPANY SECURITY ISSUES An application of Mid-Georgia Natural Gas Company for authority to sell $500,000 First Mortgage Bonds to Lincoln National Life Insurance Company of Fort Wayne, Indiana was approved by the Commission on December 19* 1963* According to the evidence and testimony by representatives of the Company, the proceeds from the sale of the Bonds will be used to pay temporary bank loans and accounts payable created by the Company's 1963 expansion program. LOAN MATTERS By an application dated October 22, 1963* Mid-Georgia Natural Gas Company requested the Commission's approval of a loan made with the Decatur Federal Savings -58- and Loan Association. The loan in the amount of $30;000 bears interest at 6$> and is repayable in 15 years. After careful consideration of this application, the Commission ruled that a public hearing was not necessary. According to the Company, proceeds from the loan were used to construct a warehouse at the Company's main office in Conyers. Representatives of the Company further stated that the terms and conditions of the loan were more advantageous than those under its First Mortgage Indenture. After careful consideration of the matter, the Commission approved this application on December 13, 1963- UNITED CITIES GAS COMPANY SECURITY ISSUES On May 28, 19 6 3 , United Cities Gas Company, an Illinois Corporation, filed an application requesting authority to sell $1,000,000 First Mortgage Bonds. In addition, the Company requested authority to execute and deliver a fourth supplemental indenture to secure the Bonds. The Company proposed to sell the Bonds to The Lincoln National Life Insurance Company and American States Life Insurance Company. The funds thus obtained, according to the Company, would be used for the reimbursement of treasury money expended to acquire property or to construct, extend, improve or add to the Company's facilities prior to April 1, 19 6 3 . After due consideration of the matter, the Commission concluded that the request to issue securities was in the public interest and should be granted and an order to this effect was issued on July 2, 19&3* CHATTANOOGA GAS COMPANY In January 1958, the Commission issued Certificate Numbers 72, 73 and 7^ to Chattanooga Gas Company giving it authority to serve Dade, Catoosa and Walker County with natural gas. However, out of a potential of lU, 6*1-0 gas customers, the Company had served only 107 by 1963* For this reason, the Commission issued a Rule Nisi against Chattanooga Gas Company ordering it to show cause why Distribution Certificate Numbers 72, 73 and 7b should not be revoked. At the public hearing held on December 11, 1963, City Officials of Rossville and Fort Oglethorpe testi fied that they were satisfied as to the character of service rendered or about to be rendered to those cities. After careful consideration of the facts presented at this hearing, the Commission on December l8, 1963; issued an order in which it cancelled Chattanooga Gas Company's Certificate of Public Convenience and Necessity Number 72 and amended its Certificate Numbers 73 and 7^ so that the Company could serve only Rossville and Fort Oglethorpe with natural gas. CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY - CITIES The Commission issued pipeline Certificate Number 91 to the City of Monticello. Approval of the Certificate of Public Convenience and Necessity to serve the city with natural gas was given by the Commission on April l8, 1963, after it had been demonstrated that an adequate supply of natural gas could be obtained and that the system would permit future growth. On April 18, 1963, the Commission approved an application by the City of Cochran for a Certificate of Public Convenience and Necessity. This certificate allows the City of Cochran to construct a pipeline to serve a portion of Dodge County with natural gas. By an order dated November 27, 1963; the Commission amended the City of Toccoa's Pipeline Certificate Number 78. This amendment allows the city to install an eight-inch pipeline of approximately 5 5 miles in length in Franklin County. The pipeline is to be constructed from the general gas fund of the city and will provide service to some 35 additional customers. -59- TRANSIT RATES On March 26, 1963, Columbus Transportation Company filed an application with the Commission requesting authority to increase its city and suburban adult fares. This application was heard on April 1 7 } 19^3 The Company needed an increase in revenue, it contended, to offset increased costs of operations such as: Raises for employees, increased costs of parts and issuance, increased cost of depreciation and additional local, State and Federal taxes. Not only had cost of operations increased, the Company maintained, but the number of adult passengers had declined by some 781,000 between 19 6 1 and 1963- Realizing the necessity for public transportation, the City Commissioners met on April 8, 1963 and approved the new rate schedule proposed by the Company. Further, in an endeavor to improve the financial condition of the Company, the City of Columbus had reduced its franchise tax from approximately $10,000 per year to a nominal assessment of $500 for 1983* After careful consideration of the facts in this matter, the Commission held that the Company had justified the need for an increase in fares and issued an order on April 18 , 1963 authorizing an increase in fares to become effective April 23, 1963. On July 22, 1963? Atlanta Transit System, Inc. and its subsidiary, Metropolitan Transit System, Inc. filed an application with the Commission in which they sought an increase in fares. The following changes in the fare structures were proposed: (a) The 20$ cash fare in effect since June 1957.? be changed to 25^. (b) The 18 3/ b $ token fare (k tokens for 75^) in effect since August i960, be changed to 2 1\r$ (4 tokens for 85^). (c) The 1 0 $ cash school fare in effect since July 195&, "be changed to 15^ cash or 10$ token (10 tokens for $1.00). (d) The cash fare on each of the zone fare lines, limited lines and feeder bus lines, most of which have been in effect since 1958, be increased by 5^* All of the above fare rates to include the 3$ Georgia State Sales Tax. All other fares and charges to remain unchanged. In the application, the Petitioners stated that upon approval of the fare changes, transfer privileges would be expanded to permit transfers from any line of Metropolitan to another line of the same Company under the same regulations that applied with respect to transfers between Metropolitan and Atlanta Transit System. At the hearing held on September 3.? 19^3> the Commission concluded that operations of the Companies were so interrelated that it would be proper to hold a joint hearing and render its opinion based upon the consolidated results of both systems. In a sworn statement, a witness testified that wage increases, purchase of new equipment, expansion of transit routes, and other cost factoi's had forced the applicants to seek rate relief. Further, that existing token fare had been in - 60- effect since the beginning of limited service in November 1954, ted existing school fares since 1956. It was pointed out by the witness that the petitioners were aware that higher fares cause a shrinkage in the number of people using transit service. The witness testified that should proposed fares be approved, Atlantans would still be paying less for transit service than rinders in cities of similar size where transit service is unsubsidized. Rate relief must be had, the witness continued, if the Companies are to continue to serve the community. As a comparison of unsubsidized transit service versus subsidized transit service, the witness cited the New Orleans transit operations which is a part of the consolidated gas, electric and transit operations of New Orleans Public Ser vice, Inc. It was stated by the witness that the New Orleans transit subsidy is in the order of three or four million dollars a year and that by comparing New Orleans and Atlanta electric rates, one could see where the transit subsidy came from. In support of this, the witness stated that Federal Power Commission re ports indicated that in New Orleans, 590 kilowatt-hours per month cost $12.56, while the same amount of electric power cost only $8.60 in Atlanta. The results of operations were set forth on Petitioners| exhibits as follows: Atlanta Transit System and Metropolitan Transit System Consolidated Statement of Income Actual 12 Months Pro Forma Year Ended With Present With Proposed July 31, 1963 Fares Fares Operating Revenues Passenger Revenues (Net of Georgia Sales Tax) Other Revenues Total Operating Revenues $ 9,806,113 323,403 $10,129,516 $ 9,TiS,ooo 10 ,687,400 323,^00 323,40c 10 ,039,4oo " $1 1 ,010,800 Expenses Operating Expenses Rent of Revenue Equipment Depreciation 8,310,341 297,0^8 806,787 8,012,300 -0- 1 ,238,400 8,012,300 -0- 1 ,238,40c Amortization of Unrecovered Cost Arising from Modernization Program Operating Taxes -0797,819 181,800 1 ,070,500 Interest Total Expenses Net Income or (Loss) 111,330 4-57,900 $10,323,325 11 0 ,960,900 T ? 193,809) ( 921,500) 181,800 1,094,800 457,900 $10 ,985,200 25,600 The record showed that by September 1963, trackless trolley type of service would be converted to an all-bus transportation service. Although this type of service is expensive, it is an important change in operation. All bus service is flexable and will allow the Company to meet demands for new routes while trackless trolley must operate over a fixed route. Although the increase in fares produces a substantial increase in gross revenues, this increase is absorbed by increases in overall operating expenses by reason of their abandonment of trackless trolleys. Also, the Petitioners anticipate normal decline of 788,600 revenue passengers, as well as a further decline of 1,893^000 passengers who will refuse to pay the fare increase. The factors used in the computation of these passenger declines appear to conform with general methods used by the Petitioners in other fare proceedings before this Commission. The Commission closely reviewed the present and pro forma costs in this proceeding and it was the opinion of the Commission that these costs, with the exceptions hereafter set forth, were reasonable for an operation this size and type and forecast, as accurately as could be foreseen, expenses which would occur after replacement of trackless trolleys with motor buses. It appeared that the transfer charge had not been included as an ele ment in computing average fares under either the present fare structure or the proposed fare structures. The Commission considered that failure to include this charge, resulted in an inaccurate portrayal of the average fare and distorted the computation of passenger loss based on the increases in such fare. Accord ingly, the Commission revised the revenue computation under both the present and pro forma fare structures to reflect the transfer charge as an element in the average fare. Further, it appeared that the Petitioners did not show in their presentation details as to the use of transfers by any particular group or in any of the classifications of fares; therefore, the Commission assumed the per centage of passengers using transfers to be uniform throughout the different fare classifications. This revision substantially reduced the indicated loss of passengers due to the increase of fares and together with an extension of the period of amortization of a major capital expense, permits the lesser increase in fares finally authorized by the Commission without undue reduction in net revenues to the Company. The Commission further concluded that all cash fares of 25 cents or more should include a transfer without additional charge, with a transfer to be available at the existing charge of 5 cents each where the fare is paid with a token. Thus, a transfer in effect would cost a regular rider in these fare classifications 3 ^/b cents in lieu of the present 5 cents - a reduction of 50$ in the fare increase proposed to be borne by this group of riders. In addition, the Commission denied the proposal to increase school fares. School fares have for many years been subsidized by adult fares on this operation and the same is true throughout the country. While the subsidization of school fares has in creased from 33 l/3$ to over 5$ during the past three decades, this subsidization is firmly embedded in the fare structure and until the riding public gives con clusive indication that it is no longer willing to bear such subsidy, the Commis sion will assume that the burden is not too great and for the present, at least, will not permit any increase in school fares. The Commission made durther adjustment by increasing the period of amortization of abandonment loss of trackless trolleys from 3 years to 10 years. After making these adjustments, the Commission issued an order approving the following fares: (a) Four tokens for 85^ including the three per cent Georgia Sales Tax. (b) A regular cash fare of twenty-five cents including the three per cent Georgia Sales Tax. (c) A five cent increase in the cash fare on each zone fare line, limited lines, feeder bus lines, including the three per cent Georgia Sales Tax. (d) Cash fares of twenty-five cents or more included a transfer with out additional charge. -62- (e) Amortization of extraordinary retirement in equal annual amounts over a period of 10 years. (f) The request for authority to increase school fares to the level of 1 5 ^ cash and 10 tokens for a dollar was denied. (g) All other fares and transfer privileges remained in effect without revision. SECURITIES On July 2, 1963, the Commission approved an application of Atlanta Transit, Inc. for authority to incur indebtedness in the amount of $5,299,6o0 and to bear interest at the rate of Gjo per annum, with principal and interest payable monthly over an eight year period from the date of the notes. Proceeds from the indebtedness were used to purchase 213 new General Motors Corporation diesel buses, which were delivered in August 1963 These buses were used to replace the system's existing fleet of trackless trolleys which were badly deteriorated and obsolete. Of the aggregate principal amount to be borrowed, $4,019,712 was borrowed from four Atlanta banks to pay for 159 diesel buses, while buses were financed by Yellow Motors Credit Corporation. The conditional sales con tract entered into with Yellow Motors Credit Corporation provides for repayment of principal and interest monthly over an eight year period. Atlanta Transit System placed its new diesel buses into operation beginning in August 1963, and the replacement of its trackless trolleys was com plete by September 30, 19&3 THE WESTERN UNION TELEGRAPH COMPANY After a public hearing held on September 11, 1963, the Commission approved, subject to complaint and further order, an application of Western Union Telegraph Company to increase the rates for messages sent within Georgia. A p proval of this application gave the Company some additional $53,720 in revenues. The following schedule shows a comparison of rates before and after Commission approval. Rate Zone Rates Before Approval Service Classification 0-125 Miles 126-225 Miles 226-425 Miles Full Rate Message For 15 Words or Less For Each Additional Word $ 1.10 .055 $ 1.20 .06 $ 1.30 .065 Day Letters For 50 Words or Less For Each Additional 5 Words or Fraction Thereof $ 1.60 .115 $ 1.75 .13 $1.90 .14 Wight Letters For 50 Words or Less For Each Additional 5 Words or Fraction Thereof $ .95 .07 $ 1.05 075 $ 1.10 .08 -63 Rates After Approval Service Classification Full Rate Messages For 15 Words or Less For Each Additional Word 0 CVi H $ 1.30 $ 1.45 .06 .O65 .07 Day Letters For 50 Words or Less For Each Additional 5 Words or Fraction Thereof $ 1.75 13 $ I .85 .135 *p 2 .10 .155 Night Letters For 50 Words or Less For Each Additional 5 Words or Fraction Thereof $ I.O5 .08 $ 1.10 .08 $ 1.25 .09 A general increase in telegraph rates was necessary due to an increase in wage costs. In fact, labor contracts became effective in June 1962, adding some $10.1 million on an annual basis to the Company's systemwide landline operating expenses. As a result, Western Union filed a revised tariff with the Federal Communications Commission asking for increases in rates covering the interstate portion of the Company's telegraph message and money order message service. The tariff as revised became effective on July 10, 19 6 3* Revised tariffs approved by this Commission correspond to changes in the Company's inter state tariffs filed with the Federal Communications Commission thereby providing a uniform schedule of telegraph rates for both state and interstate service. Further, revenue from the approved rates will apparently not exceed operating revenue deductions as the following schedule shows. Georgia Intrastate Operating Revenues Operating Expenses Uncollectible Revenue Depreciation Expense Operating Taxes Year Ended December 31* 1962 $766,321 1,694 53,508 39,816 $ 7 8 3 ,0^9 861,339 $ 76,290 During 1963, Western Union filed tariff changes which requested authority to close telephone operated agency offices at Acworth, Danville, Green ville, Machen, Sargent, Tennille, Ochlocknee and Pavo, Georgia. The basis of the closure was due to insufficient business being generated in the town areas. In addition to the closing of telephone operated agencies, open hour operations were reduced at Fitzgerald and Albany, Georgia, Petitions were filed with the Federal Communications Commission, which agency granted the company's petition and the appropriate tariff changes were accepted by this Commission. New service offerings were made during 1963 as follows: Flat-Rate Personal Opinion Messages: A Flat-Rate Personal Opinion Message is a message which contains 15 words or less in plain English language in its text, which is restricted to an -64- expression or personal opinion or an issue of general, national or regional interest and which is addressed to the Governor of Georgia, to the Lieutenant Governor, to a Senator, or to a Representative, and which is destined to Atlanta, Georgia. Flat-Rate Personal Opinion Messages are accepted prepaid. If the text of a message offered as a Flat-Rate Personal Opinion Message contains 16 or more words in its text, the sender will be given the option of reducing the text to 15 or fewer words or sending the message as a Telegram, Day Letter, or Night Letter at the rate applicable under such service classification. The address shall be limited to the title "Governor", "Lieutenant Governor", "Senator", or "Representative" as appropriate, the addressee's name and Atlanta, Georgia as the destination. No street name, room number, building or other address information is required, and such information, if furnished, will not be transmitted. The signature shall consist of the name of one individual, one family name or one husband and wife, and in each instance shall be followed by the sender's address which will be transmitted, but will not be counted or charged for. The sender may include, at no e:rbra charge, his title and the name of an organization with which he is associated. As an example: John Q, Smith, President Highway Improvement Association 212 State Street Flat-Rate Personal Opinion Messages are subject to handling at the con venience of the Telegraph Company, with delivery to be made not later than midnight of the ne;rt day following the date of acceptance, Sundays and holidays excepted. On Flat-Rate Personal Opinion Messages, "collect", "repeat back", "personal delivery only" and "report delivery" services are not available. For each Personal Opinion Message, as described above, a flat-rate of 85 cents applies. Personal Opinion Message service was first offered in an interstate basis in 1962 and has continued to grow in popularity. This nationwide service permitted the expression of opinion at a flat rate of 85^ for Ip words to the President of the United States, the Vice President, Senators and Representatives at Washington. This service met with such wide spread approval that it was offered on an intrastate basis and is available now in all of the cities in the continental United States except Illinois, where it is expected to become effective sometime in 1964, and Alaska. Telex Service Telex Service is primarily an interstate service, but it is available for intrastate service within Georgia between subscriber stations connected to Telex Service exchanges of the Company. Telex Service is that of providing facilities including equipment for the handling of telegraph communications directly between any two subscriber stations. The calling subscriber may "65- establish a connection to only one other station at a time. The term ''station" as used in connection with Telex Service denotes each set of transmitting and receiving equipment, or receiving-only equipment on the premises of the sub scriber. Telex subscribers can dial direct customer-to-customer teleprinter connections with other subscribers for message and data transmission on a toll basis. They can also send "Tel (T) ex" messages which are a combination of Telex and regular public message services. SUMMARY The rapid growth of Georgia's population and associated utility increased plant facilities has placed the Commission at a cross road in the history of the State's regulation of public utilities. During the span of the past four years, the electric, gas and telephone utilities have increased the value of plant in service to nearly one and a quarter billion dollars, and the number of consumers to seme two million, eight hundred and seventy thousand. Suffice to say, the potential demands expected by the Commission will constantly increase. Therefore, in keeping with the Commission's long-established policy of the rendition of prompt attention to citizens* request for information, investigation and the es tablishment of utility service at reasonable rates, a competent technical staff of sufficient size is imperative for efficient utility regulation. For the past two years, the Utility Division staff has been operating with only eleven individuals, and this is three under the authorized strength. As a result, much important work, such as auditing and technical investigations has of necessity been postponed indefinitely. In order to assure a continuing program of progressive and efficient utility regulation, the authorized staff level should be established just as soon as adequate funds are available. ^AVAf 'Oooc* ^AY2^*X^tRG> vV^TCAV<> sjjoo^^ o^RSr^ . ' S i ^ A ^ ' V f/\*A /l 2*Z$ A^Tc*v^S sJ'WOO'^ ^TfjS X^Tst^, lG}ttVAj s^A3^ < V TsT^, A^Tca'v J tio; >|Eft S / S&*$7. sV^AV X*3O0^/ ^Tuo; otRli^V 0 'O-Ucs'iJ' ^AVO^>/V 7 sT ^Toc5> ^YAV3>^tORG7 A>T^AVAi Tu TstV GiilW 'O O O ^ ' 'on0^2^ Ntiliir 't^ [G^jTlo-koVc^j ^'oAhVOO2^>SVX) sV^Tc*^ N&Sy