Report of Georgia public service commission. Ninty-fourth report, 1966

S T A T E OF G E O R G I A
Lester Maddox, Governor
94th Report of
GEORGIA PUBLIC SERVICE COMMISSION 244 Washington St, S.W., Atlanta, Georgia 30334
January 1 , 1966 to January 1, 1967
Crawford L. Pilcher, Chairman Ben T# Wiggins, Vice Chairman Walter R, McDonald, Commissioner William H c Kimbrough, Commissioner Alpha A* Fowler, Jr*, Commissioner
A. 0. Randall, Secretary

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COM M ISSIO N E R S
I [CRAW FORD L. P ILC H E R , ch airm an I BEN T. W IG G IN S . V IC E CHAIRMAN I ALPHA A. FOW LER. JR . I WILLIAM H. K IM B R O U G H I WALTER R.M CD O N A LD

(leargia public Serbia* (!}mnmis0um
244 WASHINGTON STREET, S.W.
Atlanta, Georgia 30334

A. O. RANDALL, sec r eta r y

August 1, 1967

B O U N D B Y T H E N A TIO N A L LIBRA RY BIN D ERY CO. OF GA.

r* > w
To His Excellency Lester Maddox Governor of Georgia
Dear Governor Maddox:
As provided by law, the Georgia Public Service Commission submits herewith its 94th Annual Report of the regulatory activities'of the Commission for the year ending December 3 1 , 1966
Respectfully submitted,
Crawford L # Pilcher, Chairman Ben T. Wiggins, Vice Chairman Walter R* McDonald, Commissioner William H* Kimbrough, Commissioner Alpha A Fowler, Jr,, Commissioner

INDEX Letter of Transmittal
Introduction - - - - - - - - - - - - Public Hearings - - - - - - - - - - - -

Page
1 2

MOTOR CARRIER REGULATION
Motor Carrier Certificate & License fees- 3 Motor Carrier Certificate Decisions - - - 3 Motor Carrier Enforcement - - - - - - - - 4 Amendment of Motor Carrier Rules and
Regulations - - - - - - - - - - - - - - 3 Order Establishing Class'1? " Certificate -- 7 Order cancelling motor carrier cer
tificates - - - - - - - - - - - - - - - 26

UTILITY REGULATION

Introduction-Operating companies - - - - 34Decisions and orders - - - - - - - - - - 35

Service and complaints - - - - - - - - - 36

Other Commission activities - - - - - -

37

Applications for purchase and trans

fer of utility property - -- - - - - - 32

Applications for amendment of certifi cates - - - - - - - - - - - - - - - - - 33

Applications for certificates -- - - - - ^8

Gas Utilities:. General - Safety - - - - - - - - - - - 36 Revenue and customers,Appendix "B " - - 61 Analyses of Refunds, Appendix "C " - - - 62

Atlanta Gas Light Company:

Expansion, construction, refunds, and

rate reductions - - - - - - - - - - -

37

Statistical summary - - - - - - - - - 38

Gas Light Company of Columbus: Additions, sales and revenue - - - - - - 38 Statistical Summary - - - - - - - - - - 39

INDEX Telephone Utilities:

Page

General - - - - - - - - - - - - - - - - 40 State activities - - - - - - - - - - - - 4 1

Southern Bell Telephone & Telegraph Co* i: Station Data and DDD - - - - - - - - - - 41 Band mileage,EAS,and customer savings - 42 Securities - - - - - - - - - - - - - - - 4 9 Rate adjustments - - -- - - - - - - - - 5 1

Electric Utilities:

Operating statistics-Customer Growth - - 4$ In General - - - - - - - - - - - - - - - 4 4

Sales Activities:. Georgia Power Company - - - - - - - - - 44 Savannah Electric and Power Company - - 45

General Investigation-Rates & Practices - 46

Securities - - - - - - - - - - - - - - - 50

Order to Show Cause - - - - - - - - - - 54-

Western Union Telegraph Company - - - - 59

RAILROAD REGULATIONS
Normal Cases - - - - - - - - - - - - - - 65 Bus Pares and Services - - - - - - - - - 67 Truck Rates - - - - - - - - - - - - - - - 68 Railway Express - - - - - - - - - - - - - 72 Rail Passenger Service - - - - - - - - - 73 Rail Freight - - ----------- - - -----75 Rail Agency Service - - - - - - - - - - - 77
Interstate Transportation Cases - - - - - 80

94th ANNUAL REPORT
Introduction
The Annual Report of the Georgia Public Service Commission covering the activities for the year ending December 31? 1966, is submitted herewith in compliance with law,
The members and officers of the Commission are the same as shown in the last report.
The members, officers and personnel of the Commission as of December 31? 1966, were as follows:
Crawford L, Pilcher, Chairman Ben T, Wiggins, Vice Chairman Walter R, McDonald, Commissioner William H, Kimbrough, Commissioner Alpha A. Powler, Jr,, Commissioner A, 0. Randall, Executive Secretary & Legal Aide
Mrs* Mae A, Montgomery, Reporter Robert B* Alford, Chief Utilities Engineer IV Douglas N, Smith, Utilities Engineer III Robert W, Hayes, Utilities Engineer II Prank: G, Heald, Public Utilities Auditor James D, Barnett, Accountant II David 0, Benson, Transportation Rates Expert J, Pred Parker, Transportation Rates Specialist I L, Thomas Doyal, Transportation Rates Specialist Robert N, Pellows, Accountant II Donald J, Lawrence, Chief Law Enforcement Officer George E. Thurmond, Civil Defense Officer Larry L. Carpenter, Transportation Rates Special
ist I,
All other Commission employees are listed in
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I-- !I-- I

Miss Patricia A, Atha, Stenographer II Mrs* Geraldine Barrom, Stenographer II Mrs. Carolyn Baxley, Stenographer II Mrs, Prances R. Buchman, Receptionist Mrs, Mozelle Colquitt, Stenographer II Herbert R, Daugherty, Law Enforcement Officer W. E, Doolittle, Law Enforcement Officer Mrs. Ann R, Donehoo, Stenographer II James H, Hooks, Law Enforcement Officer Mrs. Linda H. Ingle, Stenographer II Miss Carolyn B. Jenkins, Stenographer I Mrs. Virginia R. Mann, Stenographer III Mrs. Emily Martin, Stenographer II Mrs. Evie Dell McElwaney, Typist I Mrs. Doris Mills, Stenographer IV Mrs. Mary L. Walraven, Stenographer II Mrs, Rubye D. Otwell, Stenographer II Judson L, McGinnis, Law Enforcement Officer Isaac 0. Pierson, Stenographer IV Miss Lucia A. Ramey, Stenographer II Miss Claudia L. Samples, Stenographer II T, S # Tyson, Law Enforcement Officer Mrs, Joan H, Wilson, Stenographer II Miss Anna Loraine Wolff, Clerk II Bobby Edmondson, Utility Clerk
In the foregoing list of employees Mrs. Evie Dell McElwaney was employed on January 10, 1966, and Miss Anna Loraine Wolff was employed on July 18,1966, Miss Rayellen Floren (not listed above) was employed as a student during the summer months.
Mrs. Diane Johnson Pierson (not listed above), resigned on June 1, 1966. Mrs, Mary L, Walraven (list ed above) resigned December 27, 1966. Also listed above is Mr. T* S, Tyson, an Inspector and Law Enforce ment Officer for the Commission since 1949, retired December 31, 1966.
PUBLIC HEARINGS
During the year the Commission conducted three hundred public hearings. Public Hearings commence on the second and fourth Tuesdays in each month and continue on successive days thereafter until all cur rent applications and petitions have been disposed of. All matters docketed for public hearing are heard by the entire Commission in open session, a majority of the Commission constituting a quorum.
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MOTOR CARRIER CERTIFICATE AND LICENSE FEES

The Commission is charged with the responsibil ity 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 1966 are as follows:

Certificate fees at $35*00 each, and certificate transfer fees at $7*50 each - - - - $ 2 ,972*50 Regular license fees at $25*00 each - - - -$339, 525*00 Reciprocal fees at $1*00 each - - - - - - - $ 30,325*00
T O T A L -----------$372,622.50

!h addition to the foregoing certificate and license fees of $372,622*50 collected by the Commis sion, the Railroads and Utilities under the juris diction of the Commission were subject to a tax as sessment which produced a sum of $280,000.00, which was collected by the Property and License Unit of the Department of Revenue, making a total of $652,622*50 available for appropriation to the Commission, al though it should be noted that the appropriation for the Commission was limited in the Appropriation Act of 1966 to $5 2 3 ,000.0 0 .

MOTOR CARRIER CERTIFICATE DECISIONS

During the year 1966 the following motor car rier decisions were made by the Commission:

Certificate applications;

Approved - - - - - - - - - -

68

Denied - - - - - - - - - - -

12

Withdrawn - - - - - - - - -

8

Dismissed - - - - - - - - -

9

T o t a l ------- 97

Certificate transfer applications:

Approved - - - -- - - - - - 168

Denied - - - - - - - - - - -

24-

Total -------- "15?

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Certificate amendment applications: Approved - - - - - - - - - - - Withdrawn - - - - - - - - - - - Denied - - - - - - - - - - - - - -

94
18 9
*121

Certificates cancelled- - - - - - - - - 34 Certificates suspended- - - - - - - - - 146

Certificates reinstated - - - - - - - - 120 Rules nisi issued and dismissed - - - - 45 Miscellaneous:(Extensions,reconsiderations,
control,refunds,schedules, etc,) - - -- - 118
Total Decisions- - - 8/3

MOTOR CARRIER ENFORCEMENT

During the year 1966 the grand total of one hundred thirty-six cases, either handled by the courts or present ly pending, reflects the Motor Garrier Enforcement De partments activities in the apprehension and conviction of persons, firms or corporations operating as motor car riers "for hire" either without appropriate intrastate authority from this Commission or without a registration of an appropriate interstate operating authority from the Interstate Commerce Commission* It should be noted that Georgia Law requires the registration of all "for hire" interstate motor carriers using the highways of our State even though they may be transporting commodi ties exempt from the economic jurisdiction of the Inter state Commerce Commission*
These court actions have resulted in fines or bonds posted totalling $10,617*00 and 24 months in suspended sentences* This averages approximately $78*07 per vio lation* Cases were filed in 26 different counties and fines and/or bond forfeitures remain in the county where the arrest is made*

REPORT OF MOTOR CARRIER LAW ENFORCE-

________MENT OFFICERS * REPORTS______

Mi1es Inspec- Personal License Observa'

Operated tion Contacts fees Reports

^ F10:; Reports

Herbert R* Daugherty 16,74-2 155

396 $ 3 5 3 .0 0 169

W, E. Doo little 19,461 248

292 $3,628.00 607

James H,

Hooks

32,064 137

Judson L. McGinnis 18,711 142

322 $1 ,36 3.0 0 93 504, $ 52 5.0 0 203

T,S*Tyson 22,090 183 109,068 867

160 $3.411,00 _22 875 $9 ,28 0.00 1,144 --4*

AMENDMENT OF THE GENERAL MOTOR CAR RIER RULES AND REGULATIONS
On January 18, 1966, the Commission amended Item 10 of Rule 8 to read as follows:
10, HEAVY MACHINERY, Machines or machinery, knocked down or set up,
where any part of such machine or machinery in the ship ping form tendered weighs 500 pounds or more, INCLUDING machine or machinery parts when shipped with the machine or machinery of which they constitute a part as spare or replacement parts, or when such machine or machinery parts in the shipping form tendered weigh 500 pounds or more.
The term "heavy machinery" does 'NOT include:
(a) military tanks and tank retrievers, other than scrap weighing 60,000 pounds or more
(b) the following vehicles or parts thereof, whe ther such vehicles are self-propelled or not self-propoelled when moving from the factory or assembly plant, or when moving in driveaway service or when moving on special truckaway equipment or which, because of size or weight, require special handling: passengers cars, trucks, truck tractors, trailers and semi-trailers, tractors (on wheels or on tractor treads or on combination of wheels and tractor treads), military passenger vehicles (on wheels or on tractor treads or on combination of wheels aid tractor treads), military tanks and tank retrievers% other military vehicles (on wheels or on tractor treads or on combination of wheels and tractor treads).
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On August 30, 1966, the Commission amended Rule 90 to read as follows:
SECURITIES Rule 90
(a) All companies or corporations holding certificates and operating as motor common or motor contract carriers subject to the jurisdic tion of the Commission shall make application to and secure authority from the Commission for the issuance of all stocks, bonds, notes or other evidences of debt for lawful corporate purposes, (excluding evidence of indebtedness for the pur chase of equipment under conditional sales con tracts, chattel mortgages, and/or bills of sale to secure debt* or other securities issued in con nection therewith), payable more than twelve months after the date thereof, unless the issuance of securities by such companies or corporations is subject to the jurisdiction of the Interstate Commerce Commission,
(b) Applications shall be by written petition, setting out a complete financial statement, and shall contain a statement of the use to which the capital to be secured by the issuance of such stock, bonds, or notes is to be put, with a defi nite statement of how much is to be used for the acquisition of property; how much for the dis charge or lawful refund of its obligations, or for other lawful purposes.
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"ET

On October 24, 1966, the Commission issued an order establishing a new Classification of Certificate, Class "P", thereby amending severalGeneral Motor Carrier Rules, This order is of such importance as to demand the reproduction thereof in full, as follows:

PILE MCA-11932 DOCKET NO. 3026-M
IN RE: Application of United Parcel Service, Inc, 640 West Third Street, Cincinnati, Ohio, for amendment of Rule 2 (Class! fication of Carriers) of the General Motor Carrier Rules and Regula tions adopted and published by the Commission January 1, 1963, to establish and define a new type of classification of motor carrier certificates, to be known as Class "P", and to define the same as follows, to-wit: "Class *P* - Common carriers of the within described types or classifications of property, operating over the highways of the State of Georgia, and offering service between all points in Georgia, in intrastate* or intrastate and interstate com merce, under Certificates of Public Convenience and Necessity, trans porting exclusively parcels, packages and articles not in packages (except those of unusual value, or requiring special equipment, or injurious to or contaminating to other shipments, or explosives), no one of which shall weigh more than 50 pounds or exceed 108 inches in length and girth combined, and each parcel, package or article not in a package shall be considered as a separate and distinct shipment. No service shall be provided in the transportation of packages or articles weighing in the aggregate more than 100 pounds from one con signor at one location to one consignee at one location on any one day. No carrier certificated hereunder shall enter into arrange ments for joint rates or through routes except with a commonly owned carrier transporting exclusively parcels, packages and articles not in a package, as herein defined,"

Heard September 20, 1966,

Decided October 24, 1966.

For applicant:

APPEARANCES

Lamar Sizemore, Robert E. Hicks and Irving R. Segal, Attorneys.

For protestants:
D. F. McClatchey and Thomas E. Shelton, Attorneys. Glenn B. Hester, Attorney, Allen Post and John N. Boone, Attorneys. E, Smythe Gambrell and T. M. Forbes, Jr., Attorneys, R. J. Reynolds, Jr., Attorney Tence C. Coxe, Attorney

T. Baldwin Martin, Attorney Robert Coll, Attorney Robert C, Boozer, Attorney. Horace Hartley. C,P, Tignor. John W, Greer. M. C. Dalton, Jr. B. K. McClain,

BY THE COMMISSION;

(Commissioner McDonald dissenting).

The foregoing application, along with a companion applica
tion for a Class "P" Certificate by United Parcel Service, Inc, in
Docket 3027-M, sometimes hereinafter referred to as "United", for amendment of Buie 2 (Classification of Carriers), were filed with the Commission on October 5> 1965 and both of said applications were duly advertised for hearing on October 19 , 1965, at which time appear ances for and against the same were taken Both applications were,
at that time, postponed for later assignment for introduction of evi dence. On June 1 7 , 1966, both of said applications were reassigned
^ ^ e v i d e n c e on September 20, 1966 Hoxvever, on September 16 1906, the Commission approved a motion filed with the Commission by Robert C. Boozer, Attorney on behalf of Railway Express Agency, Incon-
porated,^for postponement of the hearing on UnitedTs application for
a Class P Certificate in Docket No 3027-M, for later reassignment
on a date to be fixed subsequent to a decision by the Commission on United s application for amendment to Rule 2 of the General Motor Carrier Rules and Regulations in Docket No 3026--M to establish and define a new type of classification of Motor Carrier Certificates, Class "P"

The application o f United was duly called for hearing on September 20, 1966. Before the introduction of evidence the Commis sion, on_motion of Georgia Highway Express, Inc, denied a motion of Railway Express Agency, Incorporated, which was concurred in by Benton Bros Film Express, Inc., for amendment of the application of United in so far as it broadened the scope of the application
HISTORICAL.

4. Li Before discussing the evidence in support of and in opposition to the proposal of united it should be noted that the Commission is authorized under Section 68-629 of the Code of Georgia of 1933, which was codified from the Motor Common Carriers Act adopted August 27 1931 'to adopt such rules and orders as it may deem necessary in*the enforcement of the provisions of this Chapter. Such rules and orders
so approved shall have the same dignity and standing as if such rules and orders were specifically provided in this Chapter." In the adop tion of such rules the Commission may do so without an application
from any person and without public hearing, although it has been the general policy of the Commission to hold public hearings on any pro
posal, either by an applicant or by the Commission, for the adoption of a rule which might affect the rights of existing carriers.

While there is no specific provision "in the Motor Carrier
^ thH lze ^he ossi f i c a t i o n of carriers, the Commission has broad authority under Code Section 68-603, as follows: "The Commis sion is hereby vested with power to regulate the business of anv nerson engaged in the transportation as a common carrier of persons or property, either or both, for hire, by motor vehicle on any public
ssiiofnnWhhaass,fffrroommStihhefcaibeeg'ii'nning sohfumlodtoarls 0carberierremermebguelraetdiotnh,atadthoepteCdomm,sis

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O 9

a Classification rule Under the Motor Carrier Act of 1929* which ntedated the Federal Motor Carrier Act of 1935 by six years, the ommission adopted a Classification Rule as follows:
"RULE A. Motor Vehicle Carriers operating under the Act shall be classified as follows:
Class A - Carriers of Passengers* Class B - Carriers of Property. Class C - Carriers of Passengers and Property."
(See Minute Book 9, page 235)
Upon passage of the Motor Carrier Act in March of 1931, which repealed the Motor Carrier Act of 1929, the Commission, on April 1 5 , 1931, adopted the following Classification Rule:
"RULE A. ^Motor carriers operating under the Motor Carrier Act of 1931 shall be classified as follows:
CLASS "A" - Common carriers of passengers and/or pro perty operating over a fixed route or between fixed termini in intrastate, or intrastate and interstate commerce.
CLASS "B " - Common carriers of passengers and/or pro perty operating over the highways of the State of Georgia but over no fixed route, in intrastate, or in trastate and interstate commerce.
CLASS "C" - Common carriers of passengers and/or pro perty operating over a fixed route or~between fixed termini in interstate commerce only.
CLASS "D" - Common carriers of passengers and/or pro perty^ operating over the highways of the State ot Georgia but over no fixed route, in interstate commerce only,
CLASS "E" - Private carriers of passengers and/or pro per ty^ operating over the highways of the State of Georgia but over no fixed route, in intrastate, or intrastate and interstate commerce.
CLASS MF H*- Private carriers of passengers and/or pro perty operating over a fixed route or between fixed termini in intrastate, or intrstate and interstate commerce.
CLASS "G" - Private carriers of passengers and/or pro perty operating over the highways of the State of Georgia but over no fixed route in interstate commerce only.
CLASS "H" - Casual or occasional haulers, for hire.
A casual or occasional hauler is defined to be a motor car--
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rier engaged primarily in some other business but incidental to such primary business duties, may occassionally transport passengers and/or freight for hire, but who shall in no event make more than one trip per week, and over no fixed route#"
Following the passage of the Motor Common Carriers Act of 1931 on August 2 7 , 1931 the Commission on November 2, 1931, adopt ed the following Classification Rule:
"RULE 2. Motor Carriers operating under the Motor Carrier Acts will be classified as follows:
CLASS "A " - Common carriers of passengers and/or pro perty operating over a fixed route or between fixed termini in intrastate, or intrastate and interstate com merce, under Cetiflcates of Public Convenience and Neces sity.
CLASS "B " - Common carriers of passengers and/or pro perty operating 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.
CLASS "C" - Common carriers of passengers and/or pro perty operating over a fixed route or between fixed termini in interstate commerce only, under Certifi cates of Public Convenience and Necessity.
CLASS "D" -- Casual or occasional haulers, for hire. A casual or occasional hauler is defined to be a motor
carrier engaged primarily in some other business but incidental to such primary business duties, may occasional ly transport passengers and/or freight for hire, but who shall in no event make mpre than one trip per week, and over no fixed route.
CLASS "E " - Private carriers of passengers and/or pro perty operating 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.
CLASS "F" - Private carriers of passengers and/or pro perty operating over a fixed route or between fixed termini in intrastate, or intrastate and interstate commerce, under Certificates of Public Convenience and Necessity.
CLASS "G" - Motor Carriers engaged solely in inter state commerce and operating under Section 30 of the Acts. "

Copies of the foregoing rules have been quoted in full for the purpose of pointing out the early tendency for fragmentation of carriers into classes Over the years Rule 2 has remained "Rule 2 " but with amendments from time to time with a tendency to eliminate some of the classes. It would be superfluous to quote Rule 2 as it presently reads. However, the tendency recently has been in the original direction of expansion of the number of classes with increas ed fragmentation of classes. It should be noted that the Interstate Commerce Commission has only adopted two classes of carriers, to-wits "Regular Route" and "Irregular Route." However, there has been a bewildering atomization of certificates by the Interstate Commerce Commission. But, although this Commission has more classes of certi ficates than the Interstate Commerce Commission, it has, in reality, only two main classifications, to-wit: "Fixed Route" and "No Fixed Route," which correspond to the "Regular Route" and "Irregular Route" Classification of the Interstate Commerce Commission. The Commission is of the opinion that its method of division of carriers into classes, with additional restrictive rules, has resulted in maintain ing a better and more easily regulated motor carrier service for the public and the carriers than has resulted from the method followed by the Interstate Commerce Commission in atomization of certificates without classification further than that of "Regular Route" and "Ir regular Route." However, this Commission has, in recent years, had a tendency to atomize Class "B" Certificates. Whereas, a few years ago a carrier was permitted only one Class "B" Certificate, now one carrier alone holds more than seventy-five Class "B" Certificates, some of which authorize the transportation of only one commodity from one point of origin.
The applicant, United Parcel Service, Inc., presented only one witness, Paul Oberkotter, who testified that he is President and Director of the applicant corporation, which the companion application in Docket No. 3027-M reveals to be an Ohio Corporation, with the ad dress listed as 6A0 West Third Street, Cincinnati, Ohio, although the address of the witness and other officers, and the one stockholder, of the Corporation is listed as being 6A3 West A3rd Street, New York, N. Y. The sole stockholder of the applicant is listed as being United Parcel Service of America, Inc., a Delaware Corporation. The balance sheet statement as of June 30 , 1965, attached to the appli cation in Docket No. 3027-M recites that the value of the common capital stock is $ 3 7 5 ,000, with a surplus of $138^30,266* resulting in total capital of |l3 ,805,266.00.
APPLICANTS EVIDENCE.
Testimony was presented on behalf of the applicant through its President and Director, Mr. Paul Oberkotter, who testified that he has been associated with United Parcel Service and its affiliates for forty-one years, and that the applicant specializes in the field of small package handling and parcel delivery service. He testified that the principal features of a specialized parcel delivery service should include services similar to those offered by this company, which he summarized as follows:
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FULL TERRITORIAL COVERAGE NO RESTRICTIVE PICKUP OR DELIVERY LIMITS: Pickups and deliveries are made at shippers1 and consignees * premises'at any & all addresses throughout the area served (in this case the entire State of Georgia), without regard to whether shipper
or consignee is in a city, small town, village, hamlet or other com
munity, or even outside any populated area, and without regard to
distance from main highways. There are no restrictive pickup or delivery limits.

AUTOMATIC DAILY PICKUP STOP: A pickup driver calls auto matically each day at the shipper's premises without regard to the size of the shipper's business or the number of packages he custo marily ships* A service charge of $>2*00 per week entitles the ship per to have the pickup driver call automatically each day whether or not any packages are to be sent out* Any shipper may demand this service as a matter of right.

NEXT-DAY DELIVERY! Packages are delivered on the next busi ness day throughout the entire state.

ONE SHIPPING DOCUMENT FOR ALL PACKAGES - NO REQUIREMENT OF INDIVIDUAL BILLS OF LADINGS Shipper does not have to make out a separate bill of lading for each package. All packages to be sent out on any one day are receipted for on one shipping document*
PICKUP OR DELIVERY NOT LIMITED TO PLATFORM OR TAILGATE: Pack ages are picked up inside the premises of the shipper and delivered directly into the premises of the consignee, whether in an office building, basement, or other location and without regard to distance from sidewalk, platform or carrier's vehicles.
PROOF OF DELIVERY: Specially-designed records permit promot answering of telephone or written inquiries concerning disposition" of any package.

COVERAGE AGAINST LOSS OR DAMAGE: Rates include automatic protection against loss or damage up to $100 per package, with addi
tional coverage available at additional charge by simple notation on pickup record.

THREE DELIVERY ATTEMPTS MADE AUTOMATICALLY: If the consignee is not available, or does not have money for a C.O.D., or if for any other reason the delivery cannot be completed on the first attempt, a second and, if necessary, a third attempt to deliver the merchandise is made automatically, without extra charge, without delay and without waiting to correspond with the shipper or consignee.

REFUSED OR UNDELIVERABLE PACKAGES RETURNED AUTOMATICALLY: Any
package refused by the consignee, or which for any other reason cannot 3 f delivered, is returned to the shipper automatically and promptly, without extra charge and without first mailing a notice to him and re
quiring him to issue instructions as to the disposition of the package.

TrJ.,, , SIMPLIFIED C.O.D. PROCEDURE: Consignees may pay for C.O.D. `s

checks

out to the shipper, unless the shipper instructs?

otherwise. All such checks are promptly remitted to the shipper,along

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with cash collections There is a uniform charge regardless of amount to be collected,
CORRECTION OF WRONG ADDRESSES: When a package cannot be delivered because of an incorrect address, every reasonable effort is made/to secure the correct address and to complete the delivery The shipper is then notified of such correction.
CALL-.RETURN SERVICE: On order of the original shipper, a package previously delivered will be picked up at the place of busi ness of the shipper!s customer and returned to the shipper.
APPEARANCE OF DRIVERS AND VEHICLES: All drivers are uniform ed suitably for deliveries to professional offices, beauty shops, business offices, etc., and vehicles are maintained at a high standard of appearances.
PHYSICAL HANDLING: Facilities are designed to handle fragile merchandise with a minimum of packing.
COST MAKING USE PRACTICAL AS AN ALTERNATIVE TO PARCEL POST: Specially-designed vehicles, facilities, documentation and procedures produce a cost resulting in rates which make use of this service prac tical as an alternative to uninsured parcel post.
The service he described is offered to shippers and receivers in several states throughout the country on both a full Interstate and intrastate basis and was authorized in the six southeastern states on an interstate basis recently. The service of the applicant has been provided in Georgia Since September 6 on an interstate basis.
He further testified in summary, as follows: That the num ber of packages handled by the applicant and affiliated companies, in the areas where they serve, has grown from about six million a year in 1951 to almost 2^5 million a year at the end of 1965. The number * of shippers during that same period has grown to something in excess of 110 ,0 00 who were at the time of the hearing turning over to appli cant in excess of 1 ,100,000 packages a day. He further testified' that he expected his companies to handle approximately three hundred million packages in this type service this year; that on an average, the packages weigh approximately eleven pounds per shipment. The ap plicant treats each package as a separate shipment; that the appli cant submitted an analysis of shippers in Virginia, Kentucky, Ohio and Wisconsin who receive a daily Pickup Call in service of the same type as proposed for Georgia, having an average volume of less than five packages per day for the week ending January 15, 1966; this analysis was made from a total of 13,9 0 8 shippers in the four states and showed that 69.8$ turned over less than five packages per day and 27.1# had less than one per day to turn over for service on the automatic daily pickup call; the daily automatic pickup call was made to 5 .4# of the 13,900 shippers who had no shipments at all during the entire week; that the experience of the applicant in the four-state survey was similar to his Companyls operation in all areas where 1hey provide this Class "P" type service; that the vehicle used in the specialized par cel service were designed and built to the specifications of applil
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cant*s own engineers for providing this Class "P" type service; that the applicant is already offering the same Class "PM type service in Georgia on an interstate basis, having commenced September 6, 1966. It submitted exhibits showing that from commencement of the delivery service the following day (September 7, 1966). (only a next-day de livery would be offered by applicant in Georgia) through September 16 , 1966, deliveries had already been made to a total of 3^9 points in Georgia* The witness expected many more points to be receiving deliveries as the operation matured, and over a period, deliveries could be expected to practically every point in the state of Georgia*
At the Commission*s request, applicant provided exhibits showing the number of points and shippers that had received the pick up service by applicant in Georgia in interstate service as of the date of the hearing. This information is contained in Exhibits 25 and 26 and shows the total number of shippers in each of the 6A com munities that had used the automatic daily pickup service in the first eleven days of its introduction by applicant. The communities all over Georgia range from Rossville, on the Tennessee line, to Cairo in extreme southwest Georgia, and from Columbus to Augusta in an eastwest direction. The witness further testified that throughout the country where it and its affiliates operate it charges a uniform ser vice oharge of $2 .00 per week for the automatic daily pickup-service, with an exception in the New York City area where the charge is $4*00 per week, which is provided for in its published tariffs, and that all charges for the service are paid by the shipper. The witness stated that in his judgment it would be necessary for any carrier of fering a Class "PM type service to make deliveries not only to all cities and communities but also to points in rural areas, and that the applicant regularly renders this type service to such places as dairy farms, quarries, gas stations, schools, country clubs and the like; and that the specialized parcel delivery service contemplated by the witness for Georgia is to be used in place of United States Parcel Post. The evidence contained a list of l,All points or cities or comiiunities in Georgia having population and showing whether it has a post office and the class of post office where there is one* Of the l,All points having population, 630 do not have any post office, 177 have a first class post office, 167 have a Class Two post office, 29A have a Class Three post office, and IA3 have a Class Pour post office.
The witness further stated that if a Class MF?,i type certifi cate were granted, and it were permitted to serve under it, service would be offered to these 630 communities having no post office, as well as to all the remainder of the points; that since the size and weight limitations vary from one class of post office to another, shippers would be relieved of the burden of referring to the class of post office in packing and .sending shipments, if applicant*s uniform limits on weight of 50 pounds and size of 108 inches in length and girth combined were adopted.
The witness explained that the reasons for establishing the 50-pound 108-inch limits grew from a determination that it was about the size of package that can be handled by a driver without the use of special equipment and was about the weight in which shippers pack
-14-

their merchandise; that it was found in applicants experience as a Class **P" operator to best fit into its overall operation, and when weights exceed 50 pounds, he felt that it got into the area where motor common carriers are best equipped to provide the service and where it is really a different type service than contemplated by a Class "PM type The specialized vehicles of applicant were identified to the Commission by photographs and described as having special features uniquely useful to a parcel type operation,such as WZ " type shelves in the body of trailers especially constructed for operation in transferring packages between operating centers, double-decking packages to protect from crushing and to divide the load into two or more distribution points, and which shelves can be folded back out of the way when not needed; that roller skate conveyors are used for helping load and unload the vehicles; that, in addition, movable floors in vehicles have been developed which move the load to the right place in the vehicle and thereby free the loader or unloader from having to go deep into the vehicle to get packages; and that this type of vehicle is presently in use in Georgia by applicant in its interstate operation
The witness further stated that an important feature of the service was that it adopted methods, facilities and procedures that permit it to provide the service at a cost which in turn permits rates to be quoted which are competitive with uninsured parcel post As a further illustration, he cited the development of sorting facilities designed for special jobs to be done at particular locations, the development of simplified documentation systems, billing procedures, C. 0. D. *s, and remittance procedures He stated that such documenta tion was essential to attain the cost necessary to permit a Class "P" type operation in substitution for parcel post
The witness testified that he .would expect to receive in intra state service in Georgia approximately 12,000 packages a day coming almost exclusively from parcel post This traffic volume would be handled according to an operating plan, the basic pattern of which has already been established in Georgia for the interstate operation The evidence showed that Georgia has been divided into twelve operating areas and two hubs (Atlanta and Tifton) for the interstate operation? He testified that in his opinion any carrier holding Class "P" Certi ficate authority would have to use a similar operating plan in order to render service to and from every point in Georgia on a next-day delivery basis
PBOTESTANTS EVIDENCE.
Although appearances were entered in opposition to the appli cation by several Class MAM carriers of property, evidence in opposi tion to the application was only presented by the Class nA H Carriers of Passengers, which carriers also handle express, mail, newspapers and/or baggage in the same vehicle or combination of vehicles with passengers, as presently defined in Note 1 of Rule 2 Twelve Class
"41 Carriers of Passengers presented evidence in opposition to the ap
plication of Uhited with Exhibits and oral testimony with the follow-
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ing. witnesses:
Greyhound Lines, Inc, Southern Greyhound Lines^ Division: John E. Adkins, Vice President Traffic, and R. L. Wilson, Director of Traffic.
Southeastern Stages, Inc.: Ralph M. Medlock, SecretaryTreasurer.
Southern Stages, Inc., Atlantic Stages, Inc., and Southern Transit, Inc.: B. G. Kitchens, SecretaryTreasurer.
Tennessee Trailways, Inc.: W. H. Houk, Traffic Manager.
Continental Crescent Lines, Inc.: Prank Kegley, Director of Traffic.
Smoky Mountain Stages, Inc., and Georgia-Florida Coaches, Inc.: Malcomb Meyers, Asst. Traffic Manager.
Tamiami Trail Tours, Inc., and Service Coach Lines, Inc: F. R. Jones, Assistant Traffic Manager.
Southeastern Motor Lines, Inc.: C. P. Tignor, Vice President and General Manager.
Witness John E. Adkinsfor Greyhound Lines, Inc., Southern Division, testified that two special studies made at Greyhound!s Atlanta and Macon terminals for an eight hour period show that during this period its Atlanta express office handled 897 packages and of this number only 2A packages exceeded 108 inches in length and girth combined - the maximum length and girth which the applicant (United) proposed to handle in their service ; and that 9 7 *3$ of the shipments handled at the Atlanta Station during this eight hour period fall within the category proposed to be handled by the applicant, United, should it .obtain a Class "P" Certificate. He also testified that a study made at the Macon Terminal revealed that of the 12A packages measured, only three exceeded 108 inches in length and girth combined 97*6$ of the packages falling within the category that could be handled by United. The witness for Greyhound testified that a fur ther study of these same Atlanta shipments revealed that 9^.1$ of its packages were in the 50 pound or less category - A5 *3$ of them being less than 10 pound packages; that out of Macon, 93*8$ of its packages were in the 50 pound or less category and 50$ of them were 10 pounds or less. Greyhound*s witness further testified that on the same days the above studies were conducted it also checked all the bus bills for the entire day, which revealed that of the 1009 ship ments handled during this period, 186 shippers or 18$ did not declare any value on its shipments; that 739 or 7 3 $ declared $50.00 or less value, which is the free bus allowance, and only 8A or 8 4$ declared a value over $50,00 and had to buy extra $100 free value allowance without additional charge as proposed by United, This witness fur ther testified that a one-week study - October 1 to 7 1965- showed that,of the 5>55A Georgia intrastate express shipments handled during the test week period, A , 373 were one-piece shipments, or 7 8 <>7 $ *
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otfheth5e,55t4otaslhipsmheinptmse,nts70Shansdhliepdmendtusrinwgeigthheedteosvterwe5e0kpopuenrdiso,d;

that and of

of the

706 over 50 pound shipments, 220 or 3 1 *2$, were one-piece shipments;

the other 688$ being lot shipments made up of multiple pieces; that

during this same week Greyhound handled 4,848 shipments weighing 50

pounds or less (both single and lot shipments), 4,153 or 85$ of

which were single-piece shipments. It was contended by this witness

that all of these shipments could be subject to diversion by a Class

J,P" carrier. It was further testified that the average weight of the

shipments checked during this week's study was 24,6 pounds, and the

average weight per package 1 7 ,3 pounds - only six pounds greater than

United's average weight per package. It was further contended by

Greyhound's witness that 93*3$ of the dollar Volume of Greyhound's

express revenue could be subject to diversion to a Class "P" Carrier;

that 74$ of its package express business is concentrated iin five

cities in Georgia, which are: Atlanta, Chamblee, Columbus, Macon and

Savannah; that this concentration makes it highly susceptible to

diversion; that Atlanta alone represents 53$ of the express business^

generated in the State, and that, coincidentally, United's Exhibit

No, 26 showed 193 shippers in Atlanta, or 53$ of its shippers so far;

that 76$ of United's shipments originate in the Metropolitan Atlanta

area.

Greyhound's witness asserted that in the State of Virgina 10$ of United's shippers generate 6l$ of its business; that in the State of Kentucky 10$ of shippers generate 65$ of its business; that in Ohio 10$ of shippers generate 63$ of its business; indicating that the volume is highly concentrated in the major market areas, such as
Atlanta, where the volume is high; that Exhibit 47, an operating loss
and gain statement on Operating Division in Georgia (mostly local
divisions), shows total revenue and total operating costs, based on system costs; that for the 12-month period covered by the study, Greyhound's costs, when compared to passenger revenue above, showed
loss of over a quarter of a million dollars; that Exhibit 48 was a
special study made to determine the extent to which express contribut
ed to the expense of local service. However, on the three divisions
studied, based on intrastate passenger revenue alone, the exhibit
showed that Greyhound lost $2,794,00 during the week covered by the
study, but that by adding intrastate express revenue handled on these divisions during this same period it only lost $900.00, Further exhibits submitted bv Greyhound's witness show that its passenger revenue in 1951 was $6 1,263,000 and express revenue $1 ,7 3 8 ,000; that expenses during this period amounted to $5 1 ,9 1 7 ,000; that during 1965 passenger revenue amounted to $65,675,000, and express revenue was |13,584,000; that during 1965 Greyhound accrued expenses of $51,9 1 7 ,000; that in 1965 passenger revenue was $65,7 3 3 ,0 0 with oper ating expenses of $65,675000; that package express revenue was' $13,584,000; that overall, Greyhound's regular route expenses from 1957 to 1965 increased 26.5$ for this period; that the combined total passenger and express revenue increased 2 5.9$, indicating that express revenue increased and filled the gap between increasing costs. This witness further testified that in 1951 passenger revenue accounted for 93$ of Greyhound's total revenues - express amounting to only 2.6$, In 1965, passenger revenue accounts for 7 7 $ of total revenue with express accounting for nearly 16$ of total revenue.

-17'

This witness further testified that should Greyhound exper ience any significant diversion in its package express business it *rould be forced to do one or a combination of things; Request the Commission to eliminate some local commuter runs which are costly to operate; raise its rates; or maybe be forced to abandon some routes altogether

Ralph M. Medlbck, a Witness for Southeastern Stages presented
an income statement which indicated that express revenue for the
seven months covered by the exhibit was more than twice the net pro
fit for that company curing this period. Exhibit No. 62 offered by this witness showed that in 1955 onl6 5i$ of Southeastern*s total revenue was derived from package express, whereas in 1965-66 it amount ed to 23$ of total revenue He testified that any serious reduction
or diversion of this revenue would seriously affect its ability to
provide service. This witness further testified that a survey made on January 28, 1966 revealed 91*4$ of its packages were 50 pounds or less and 49.3$ were 10 pounds or less - all within the area of the proposed classification Exhibit No. 64 showed the declared values on authorized Georgia intrastate shipments January 28, 1966 at the Atlanta station. The percentages shown thereon compare substantially
with those shown in a similar Greyhound study. He further testified
that approximately 92$ of the express handled by that company is actually within the range of this application and would be subject to diversion. Exhibit No 65 showed, that, of the 267 Georgia intra state shipments during the entire 24-hour period of January 28, 1966,
74.53$ of them were brought to its terminal between 300 PM and 10:00 PM, meaning that substantially all of these shipments would not be
delivered at destination until the following morning Conversely,
inbound intrastate shipments to Atlanta on this same day amounted to 56 shipments, 7 6 76$ of which were delivered to the consignee between 6:00 AM and 10:00 AM. In other words, they were overnight shipments*
This witness asserted that if deliveries were made under the proposed
Class "P" Classification it would be directly competitive with three-
fourths of these shipments checked* This witness asserted that any
substantial diversion of express from Southeastern Stages could result
in cutting back of some service and possible increase in passenger
rates to offset any substantial loss in its express business.

B.

G. Kitchens, witness for Southern Stages, Inc., who also

testified for Atlantic Stages, Ifec*, and Southern Transit, Inc.,

testified that the express revenue received by these carriers repre

sent a substantial portion of the income of the three corporations,

and borders close to being the difference between them showing a

profit instead of a loss. This witness further asserted that the

creation of the new class of certificate sought by the applicant

would cause considerable drain on his companies1 express business0

Prank Kegley, a witness for Tennessee Trailways, Inc., pre
sented an exhibit shoiving the number of packages weighing less than 50 pounds, and the number weighing more than 50 pounds, which were handled at its Atlanta express office during the hours JtOO PM to 7:00 PM, September 1, 1966* This exhibit showed that of the 395 packages measured during this period, 373 were under the 108 inch limit, or 94.43$, and that all of these packages would come under

*-18-

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the limitation of the Class "F" Certificate proposed* It was fur ther asserted that these same packages were weighed and 97*97% of them weighed under 50 pounds* This witness also testified that its express revenue is most important to his company and that any diver sion of same would be detrimental, and that such diversion of traffic would certainly mean a curtailment of service or Increased rates either in package express or passenger fares.
'Malcolm Meyers, a witness for Smoky Mountain Stages, Inc, presented evidence showing its total revenue, miles, cost and net earings for the six months period ended June 30, 19&6. These statis tics showed total revenue of $610,1^0*76 compared to cost of $618,539*46 for the same period, or loss of $8 ,398*7 0 ; and that if express revenue accrued during this period is deducted therefrom it would result in operating loss of $130,000 for the six months period* It was further testified that any appreciable diversion of Smoky Mountain's express revenue would certainly have a disastrous effect on much of the service now being rendered in Georgia.
A witness for Southeastern Motor Lines, Inc*, C. P. Tignor, testified that express revenue amounts to between 15 and 16^ of the gross revenue of Southeastern Motor Lines and that any diversion of express would be disastrous to its operation.
The general Import and effect of the evidence submitted by witnesses for the Class "A" Carriers of Passengers is that the estab lishment of the classification of Class MPM Certificates and the is suance of a certificate to the applicant in Docket No. 3027-M, and similar applications for Class "P Certificates pending before the Commission, to-wit: Brown Transport Corp. in Docket No. 3030-M, Theatres Service Company in Docket No. 3031-M, and Benton Bros. Film Express, Inc., in Docket No* 3032-Mp and others which may be filed, would result in such a significant diversion of package express busi ness from the bus lines as to require them to eliminate some local commuter runs, raise their passenger fares, and in some instances be forced to abandon some routes altogether. These carriers, however, make no mention of their right to present evidence to this effect at the hearings on applications for certificates* Although the detailed exhibit evidence presented in this hearing was in support of the ~ claimed result, It would be more appropriate to present this evidence in opposition to each application for a certificate under the new classification.
FINDINGS.
Upon consideration of all of the evidence, both for and against the proposed new classification, and, in addition thereto, after careful consideration of the history of all classes of motor carrier regulation in the state of Georgia, the Commission finds that the proposed classification, Class MP", is not a departure from its past decisions in regulation through classification, but on the con trary, will open up the gate for a freer, faster and perhaps a less expensive method of serving the shipping public for the movement of
-19-

small package freight. The Commission cannot fail to overlook the absence of any evidence in opposition to the proposed Classification, Class "P", by Class "A" Carriers of Property, which is the only class of carrier that has, from the beginning of motor carrier regulation, been required to provide this type of service to shippers and receiv ers located on the routes described in the certificates issued to this class. There is indication that some Class "A" Carriers of Pro perty would welcome relief from the responsibility of having to pro vide small package service, and considerable evidence that one holder of Class "A" Certificates has, in effect, ceased to provide this type of service
It should also be noted that'the only other class of carrier authorized to provide this type of service,Class "A" Carriers of Pas sengers, does not have the same responsibility for providing this type of service as does Class "A" Carriers of Property, The princi pal responsibility of Class "A" Carriers of Passengers, is the trans portation of passengers, and their baggage. Indeed, they are not re quired to carry any parcels or packages other than those belonging to the passengers traveling in the same vehicle when they do not have room. Furthermore, they do not, as a general rule, provide pick-up and delivery service, and more often than not do not have local agents for acceptance of the shipments. No class of carrier should claim protection to a right for which there is not equal responsi bility, The Commission is of the opinion that the service proposed under the Classification, Class MFH, will not materially affect the handling of emergency shipments of small packages by Bus Companies, and that the fears they have will not materialize.
Although the establishment of a new Classification of Certi ficate, Class "P", is the result of an application made by a carrier which now has an application pending for this type of certificate, this order shall, in no way, effect any decision of the Commission on that application. The application of United for a Class MPM Certifi cate in Docket No, 3027-M will be decided on the evidence in that docket after hearing. Furthermore, the Commission will not prescribe the Classification, Class "PM, in the manner and form as applied for by United but will provide its own form of classification, as herein after set forth.
W H E R E F O R E , IT IS
ORDERED: That Rule 2 of the General Motor Carrier Rules and Regulations issued January 1, 196 3 , be, &ncL the same is, hereby amend ed by adding thereto a new Classification of Certificate, Class "P", to read as follows:
CLASS "PW - Common carriers of Property (limited to parcels, packages, and articles not in packages), 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 con venience and necessity; so that Rule 2, as amended will read as follows:
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CLASSIFICATION OF CARRIERS

RULE 2

Subject to the definitions listed in Note-1 and Note-2 of this rule, Motor Carriers operating under the Motor Carrier Acts will be classified as follows;

CLASS

- Common carriers of passengers and/or

property operating over a fixed route or between fix

ed termini in intrastate, or intrastate and interstate

commerce, under Certificates of Public Convenience and

Necessity.

CLASS 5,B" - Common Carriers of passengers and/or property operating 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.

CLASS "C5* - Common carriers of passengers and/or property operating over the highways of Georgia but over no fixed route, between contiguous municipali ties or between points within an area comprising a municipality and the residential, commercial and in dustrial areas adjacent to the city limits of a muni cipality or contiguous municipalities in intrastate, or intrastate and interstate commerce, under Certifi cates of Public Convenience and Necessity. (The unincor porated territory which was within the corporate limits of the Village of North Atlanta on June 29 19^> shall be deemed a municipality in the interpretation and ap plication of this Rule.)

CLASS "E"- Contract carriers of passengers and/or property operating 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.

CLASS "G " - Motor carriers engaged solely in in terstate commerce and operating over the highways of the State of Georgia under Registration Permits.

CLASS MM H - Contract carriers of the following described 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, sbocks and bonds, negotiable and nonnegotiable instruments, securities, postage, revenue stamps, rare objects and other valuable documents and items o'"

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CLASS "P" - Common carriers of property (limited to parcels, packages, and articles not in packages), operating 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.
Note-1: The term "passengers" shall mean and include express, mail, newspapers and/or baggage of passengers in the same vehicle or combination of vehicles with passengers.
Note-2: The term "'property" shall mean and include general commodities, except as otherwise restricted in a certificate or by rule or regulation.
ORDERED FURTHER: That Rule 10 of the General Motor Carrier Rules and Regulations issued January 1, 1963, be, and the same is, hereby amended by adding a new paragraph numbered (c) and designate the present paragraph (c) as paragraph (d), so that the new paragraph (c) will reads
"(c) Motor Carriers of Property operating under Certificates Class "P" shall not enter into ar rangements for interchange of traffic except with a commonly owned carrier or a carrier transporting under such Class "P" certificates parcels, packages and articles not in a package";'
so that Rule 10, as amended, will read as follows:
INTERCHANGES
RULE 10
(a) Motor carriers of property operating under certificates Class "A" will be required bo receive pro perty destined to stations located on routes of other Class "A" carriers, and to interchange such property, at rates prescribed by the Commission, with such con necting carriers.
(b) Where shipments are interchanged between Class "A" carriers under the provisions of para graph (a) the carrier in possession of the shipment may, in the absence of other satisfactory arrange ments, require the connecting carrier to make settle ment of the accrued freight charges (divisions) up to the interchange point, at time of interchange.
(c) Motor carriers of property operating under
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certificates Glass "P" shall not enter into arrange ments for interchange of traffic except with a com monly owned carrier or a carrier transporting under such Class "P" certificates parcels, packages and articles not in a package.

(d)

Carriers qualified to handle C. 0. D. (col

let-on-delivery) shipments will not be required to

accept C. 0. D. shipments destined to points which

require interchange with another carrier in order

to effect delivery, but may confine the handling of

C. 0. D. shipments to points served by the carrier

accepting the C. 0. D. shipment for transportation,

provided that where a carrier elects to so restrict

the handling of C. 0. D. shipments under the provi

sions of this paragraph such restriction shall be

published and made a part of the tariff publication

naming the applicable rates and charges/

ORDERED FURTHER: That Rule 89 of the General Motor Carrier Rules and Regulations issued January 1, 1966 be, and the same is here by, amended by striking the heading reading as followst "Class "CM Certificate Operations" and by substituting the following heading: Class "C" and Class "P" Certificate Operations? and by further amending said rule by designating the present single paragraph thereii as "(a)", and by creating a new paragraph (b) therein, to read:
(b) Motor Carriers of Property as defined in the classification of carriers - Class "P" - shall be limited to parcels, packages, and articles not in packages (except those of unusual value, or requir ing special equipment, or injurious to or contami nating to other shipments, or explosives), no one of which shall weigh more than 50 pounds or exceed 108 inches in length and girth combined, and each parcel, package or article not in a package shall be considered as a separate and distinct shipment. No service shall be provided in the transportation of parcels, packages, or articles not in packages, weighing in the aggregate more than 100 pounds from one consignor at one location to one consignee at one location on any one day?
so that said Rule 89, as amended, will read as follows:

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CLASS "C" AND CLASS "P" CERTIFICATS OPERATIONS
RULE 89
(a) The terra "residential, Commercial and indus trial areas" as used in the Classification of Carriers - Class "C" - shall include all areas within the highway mileage radius of two miles of the city limits of a municipality unless otherwise defined in the certificate. Motor car riers operating under certificates Class "C" may not receive property destined to or from points beyond the area as herein defined through inter change,
(b) Motor Carriers of Property as defined in the classification of carriers - Class "P" - shall be limited to parcels, packages, and articles not in packages (except those of unusual value, or requiring special equipment, or injurious to or contaminating to other shipments, or explosives), no one of which shall weigh more than 50 pounds or exceed 108 inches in length and girth combined, and each parcel, package or article not in a package shall be considered as a separate and distinct shipment. No service shall be provided in the transportation of parcels, packages, or articles not in packages, weighing in the aggregate more than 100 pounds from one consignor at one location to one consignee at one location on any one day.
ORDERED FURTHER: That Rules 5(a), 9(a) and 9 (c), 8 6 (a) and 8 7 (a) of the General Motor Carrier Rules and Regulations issued January 1 , 1963 be, and the same are hereby, amended in the follow ing particulars:
That the words "Certificates Classes "A", "B", "C" and "E " in paragraph (a) of Rule 5, and paragraphs (a) and (c) of Rule 9, be, and the same are hereby stricken, and that the words "all classes of certificates" be inserted in lieu thereof; that Rules 86(a), 8 7 (a) and 8 7 (b) of said Rules be, and the same are hereby, amended, in the following particulars: that the words "Certificates Classes "A", "B", "C", "E" and "M" in paragraph (a) of Rule 86, and in Paragraphs (a) and (b) in Rule 87 be, and the same are hereby, stricken, and that the words "all Classes of Certificates" be inserted in lieu thereof.
-24-

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BY ORDEB OP THE GEORGIA PUBLIC SERVICE COMMISSION, this the 2^th day of October, 1966.

A. MtrFO\.L RDlAAZNATD' ALL, SECRETARY

/ 2L CRAWFORD L. PILCHER, CHAIRMAN

DISSENTING OPINION OP COMMISSIONER WALTER R McDONALD
I am not convinced by the record in this proceeding that there is any public need for the fragmented operations proposed to be rendered under the Class "P" classification sought* There were shown no real deficiencies in the services of the existing carriers and I see no need for a new classification which will permit specialized operations to divert substantial traffic from those carriers and thereby place in jeopardy existing services and existing rates and fares. Particularly do I oppose the creation of a classification designed primarily to fit the operations of one new carrier, with the limitations in such classification care fully drawn so as to permit (and require) that carrier to transport only the cream of the traffic and relieving it of all obligations to handle the individually heavy or bulky articles which involve higher labor costs and more expensive equipment. The primary bene fit of such a classification - other than to the carrier fortunate enough to obtain such a certificate - will be to a limited number of mass shippers and the benefits to that select group will be far out-weighed by the impact on existing carriers and the public served thereby - an impact which cannot help but cause pressure for increased truck rates and Increased bus fares and reduced bus schedules, to say nothing of possible discontinuance of service by bus lines to which the revenue from bus express means the differ ence between operation and collapse. I am, therefore, unable to concur with the decision of the majority and accordingly dissent therefrom.

(SIGNED)

Walter R. McDonald, Commissioner.

-25-

The following order cancelling all certificates of one of tje ;arge "fixed route# carriers in the state is consid
ered a land mark in motor carrier regulations and, for that reason, is reproduced in full., as follows:

File MCA-12349 Docket 3225-M

IN HE: ROLE NISI AGAINST WATSON-WHSON TRANSPORTATION SYSTEM, INC,, A NEBRASKA CORPORATION, 92nd STREET AND STATE LINE, KANSAS CITY, MISSOUTI 64ll4, TO SHOW CAUSE WHY THE COMMISSION SHOULD NOT CANCEL AND REVOKE CLASS "A" CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY
NOS. 941, 1029, 1765, 2633, 2708, 2787, 2810, 2905, 2975, 2983 and 3064 AUTHORIZING THE TRANSPORTATION OF PROPERTY VIA THE ROUTE and/or ROUTES DESCRIBED IN SAID CERTIFICATES, ON ACCOUNT OF FAILURE AND REFUSAL TO COMPLY WITH THE MOTOR CARRIER ACTS OF 1931, AND THE RULES AND REGULATIONS OF THE COMMISSION, IN THE FOLLOWING PARTICULARS: FAILURE TO PRO VIDE ADEQUATE SERVICE OVER THE ROUTES AUTHORIZED TO BE SERVED IN SAID CERTIFICATES._________________ ______

APPEARANCES

FOR RESPONDENT:

FOR COMMISSION:

Allen Post and Stephens P. Murphy Harold N. Hill, David 0. Benson & J. Fred Parker

B. K. McClain, Brown Transport Corp. and N. A. Smith, Huckabee Transport Corp. as their interest may appear

BY THE COMMISSION:
The foregoing Rule Nisi, after due notice, came on for hearing and was heard on October 25, 1966. At the hearing a copy of each of the certifi cates listed by number in the Rule Nisi was made a part of the record in this proceeding. Briefly, they authorize the transportation of general commodities between Atlanta and Augusta, Georgia, via State Highways Nos, 8 and 10 (serving all intermediate points), with an alternate route via Interstate 85 and State 120 between Atlanta and Lawrenceville, with closed doors, and via State Highway 47 between Washington and Augusta, serving all intermediate points (Certificate 1029); between Athens and Georgia-South Carolina State Line, via State Highway No. 8, serving all intermediate points, and serving Watkinsville as an offroute point (Certificate No. 94l); between Decatur and Athens, via State Highway
- 26-

- 2-
10, serving only Monroe (Certificate 176 5); between Athens and Elberton, via State Highways Nos. 8 and 72, serving all intermediate points (Certificate 2708), and serving Watkinsville as an off-route point; between Winder and Monroe, via State Highway No. 11 (Certificate 2 78 7); and between Winder and Braselton, via State Highways Nos. 11 and 53 (Certificate 2983), serving all intermediate points; between Atlanta and Army Depot at Conley, via State High way No. 42, serving no intermediate points (Certificate 2975); between Royston and Washington, State Highway No, 17* serving all intermediate points (Certificate 2ol0); between Augusta and Clark Hill Dam, via State Highways Nos. 104 and 28, serving no intermediate points (Certificate 2635)* and between Leah and Augusta, State Highway No. 104, serving no intermediate points (Certificate 2905); and between Atlanta and Lockheed Aircraft Corpo ration, limited to the transportation of Internal Combustion Engines only, serving no intermediate points (Certificate 3064). Although all of said certificates were transferred to the present holder on July 25, 1962, they have been in continuous operation by previous holders since they were origi nally issued.
The evidence presented at the hearing from Commission records and investigations by the Secretary of the Commission, A. 0, Randall, and staff members of the Commission, David 0. Benson, Transportation Rates Expert, and J. Fred Parker, Sr. Transportation Rate Specialist, and Donald J. Lawrence, Chief Law Enforcement Officer, in support of the Rule Nisi, which is undis puted by respondent, was substantially as follows: That respondent, WatsonWilson Transportation System, Inc., sometimes hereinafter referred to as Watson-Wilson, after having provided adequate and complete service for approximately two years, asserted that in the early part of 1964 it was losing money in the operations under said certificates, and as testified to by one of its employees, summarily determined, without any authority from the Commission and without even any notice or embargo, in violation of Rule 4 of the Commission^ General Motor Carrier Rules and Regulations, that it would discontinue the full and complete service it had been providing under said certificates, and confine its operations principally to national accounts; that in pursuance of this objective it closed at Hartwell, Monroe, Winder and Washington its terminals and reduced the Augusta terminal to a mere skeleton force, where it had some 17 employees and 15 pickup trucks in September, 1964; that it notified its customer shippers that it would no longer accept an intrastate shipment which did not meet its arbitrary selective selling program of providing at least a revenue of $18.00 per shipment, and let it be known that it preferred that it not be tendered any intrastate shipments whatever; that if the shipper insisted on tendering intrastate shipments that they would be accepted but held in the warehouse until a truckload of such shipments had accumulated; that this policy was adopted and adhered to continuously until the date of this hearing regardless of, and in defiance of, repeated admonitions and directions from the Commission and its Staff, including two conferences with officials of the Company, one in April and one in December, 1964, that it was not providing adequate service as required by the Commission, and that failure to do so might result in the cancellation of its certificates; that this policy was further substantiated by its complete indifference of and failure to appear in opposition to applications by Harper Motor Lines for certificates to operate between Monroe and Braselton, Georgia, and between Elberton and Washington, Georgia, respectively, over the certificated routes of Watson-Wilson, which applications were granted and certificates issued in April and May, 1964, respectively, on evidence that Watson-Wilson had failed
-27-

- 3 -
to appear and submit evidence that the service was adequate as contemplated in Code Section 68-609 of the Code of Georgia 1933* as amended; that this failure by Watson-Wilson to show adequacy of service was more glaringly evi dent in its failure to appear and present evidence of adequacy of service in the application of R. C, Motor Lines, Inc, for a Class "A" Certificate to operate between Atlanta and Augusta, Georgia directly over the route served by Watson-Wilson under its principal Certificate No, 1029, which application of R. C. Motor Lines, Inc, was granted and the certificate issued in October, 1965; that evidence submitted at the hearing on this Rule Nisi by two shipper witnesses from Athens, Georgia, appearing in person, with 90 affidavits of other witnesses, that Watson-Wilson has not, even at the time of this hearing and by its own admission, changed this policy.
More specifically, exhibit evidence presented by Watson-Wilson at this hearing in response to the Rule Nisi confirms the inadequacy of its present service, and no evidence was presented to show that regular, daily service is being provided for all intrastate shipments tendered to it for all points on the routes authorized to be served in said certificates, either at the present time, or at any time since 19$*> which is the type of service the Commission has consistently required of all holders of Class "A" Certifi cates throughout the history of motor carrier regulation.
The evidence shows that the Commissions staff, after receiving numerous complaints from shippers regarding the failure of Watson-Wilson Transportation System to provide adequate service along its certificated routes, had several conferences with officials and employees of this carrier regarding service to these shippers. The evidence further shows that in December, 196^, the Commissions staff requested that this carrier furnish this Commission copies of all its waybills covering all intrastate movements for the latest three month period. This directive was complied with and bills were furnished for the months of September, October and November, 196^. The staff abstracted these bills and the result is shown in Columns 1 to 4 on sheet 1 to Appendix "A", attached hereto for outbound shipments and Columns 1 to k on sheet 2 to this appendices fGr inbound shipments. This study developed that this carrier had curtailed its service to a great extent during this period, except to certain shippers, Watson-Wilson was then directed by the Commission to resume operations over all routes covered by its certificates, as well as to reopen the Augusta terminal.
The Commission continued to receive complaints of the inadequacy of Watson-Wilson*s service, particularly at hearings in other proceedings, and this resulted in the issuing of this Rule Nisi,
In order that the present service could be ascertained, the Commission requested at the hearing on this Rule Nisi that waybills be furnished covering all intrastate service performed over this company*s certificated routes for the latest six month period. The staff has also abstracted the bills furnished and the result is shown in Columns 5> 6* 7* 8, 9 and 10 of sheet 1 to Appendix "A" for outbound shipments and the same column numbers on sheet 2 for inbound shipments.
It can readily be seen from an examination of this appendices that the service has substantially decreased, if not completely stopped at most points along the certificated routes. Comparing the service in I96U with
-28

-b -
that now "being performed, the total outbound shipments for the three months of 196^ were 376 as compared to 27 for the latest six month period. The inbound shipments handled for the same three month period were bOO as compared to 88 for the present six month period. Comparing both the inbound and outbound shipments handled, this carrier is now handling only \b.byt> as many shipments presently in six months as it was handling in three months in 1964, at which time the Commission's study showed it was curtailing service even then*
The record of the Commission in Docket No, 3021-M, (application of Georgia Highway Express, Inc, for transfer of the Watson-Wilson certificates, which application was denied by the Commission on the date this Rule Nisi was issued) which has been incorporated into this record by reference, and con firmed by testimony of the Secretary of the Commission, leaves no doubt in the minds of the Commission that the respondent, Watson-Wilson, has never changed its determination made in the early part of 19$+, to discontinue its intra state operations without even making an attempt to secure authority from the Commission to be liberated from its legal obligation to provide adequate service except by the foregoing application to sell and transfer the certifi cates,
FINDINGS:
Rule 92 of the General Motor Carrier Rules and Regulations adopted and promulgated by the Commission reads as follows:
Failure of any motor carrier subject to the jurisdiction of the Commission to comply with the Rules of the Commission or any amendments thereto shall be cause for revocation of a certificate or permit.
Rule 22 (a) of said Rules and Regulations reads, in part, as follows:
(a) The Commission may at any time, after notice and oppor tunity to be heard, suspend, revoke, alter or amend any certificate or registration permit, if it shall be made to appear that the holder has willfully violated or refused to observe orders, rules, or regulations prescribed by the Commission or provisions of the Act, or any other law of this State regulating or taxing motor vehicles, for hire, and applicable to the holder of such certificate, or if, in the opinion of the Commission, the motor carrier is not furnishing adequate service . . .
Rule k (a) (b) (c) (d) (e) and (f) of said Rules and Regulations reads as follows:
(a) Motor carriers operating under Class "A" certificates will be permitted to discontinue their entire service on any route upon thirty days' published notice and thereupon their certificates shall be surrendered for cancellation,
(b) Holders of Class "A" certificates may be permitted to permanently discontinue any part of their service on any
-29-

- 5-

route upon thirty days1 published notice, subject, how ever, to the discretion of the Commission to withdraw, suspend or revoke the certificate for the entire route, if in the opinion of the Commission such diminished service is not adequate or any longer compatible with the public interest.

(c) No motor common carrier operating under Class "A" certificate shall temporarily suspend operation, either wholly or in part, by embargo or otherwise, except upon authority from the Commission.

(d) Where, under authority from the Commission, service is temporarily discontinued the carriers shall give written notice of discontinuance or embargo, specifying the extent thereof, the date effective, its duration if known, and the reason therefor and two copies thereof shall be mailed by first class mail to the Commission, and the said discontinuance or embargo shall be posted for public inspection in each office of the carrier where the discontinuance or embargo is effective, and one copy shall be served upon each connecting carrier with whom the issuing carrier interchanges traffic in cases where the traffic so interchanged is affected and so far as practicable the discontinuance or embargo shall be brought to the attention of interested shippers, consignees and the public.

(e) Except in instances where the discontinuance or

embargo specifies the date of its expiration, a notice

,,

of modification or termination shall be issued, filed,

posted and given interested shippers, consignees and

connecting carriers in the same manner as provided in

paragraph (d).

(f) All other motor carriers may suspend or abandon service immediately by surrendering their certificates or registration permits for cancellation and returning to the Commission all licenses issued thereunder.

The respondent, Watson-Wilson Transportation System, Inc., has failed to show any cause why the Commission should not cancel and revoke all of said certificates. The contention by respondent at the hearing that the Commission in August of 1965, approved an application for change of control of Watson-Wilson, through purchase of the stock in said Company by Yellow Transit Freight Lines, Inc., subject to approval by the Interstate Commerce Commission, condones or justifies its violation of Rule k of the General Motor Carrier Rules and Regulations by discontinuance of a part of its service at all points, and all of its service at many points, without any public notice and without seeking or obtaining any authority from the Commission, has no merit. There is no evidence that the new owner has ever taken any steps to change the intent and purpose of the Corporate entity, Watson-Wilson Transportation System, Inc., to reverse its former and con tinuous evident intent and purpose to discontinue its intrastate operations

-30-

6 -

-

under said certificates, or even to seek iegal authority from the Commission to discontinue its intrastate operations, either in whole or in part. Neither has respondent shown by any evidence that it has, at any time since 19&J-, provided, or is at present providing, adequate service over the routes authorized to be served in said certificates, as it is required to provide and has repeatedly been directed to provide.

WHEREFORE, IT IS

ORDERED: That Class "A" Certificates Nos. 9hl, 1029, 1765, 2635, 2787, 2708, 2810, 2905, 2975, 2983 and 306^, issued to Watson-Wilson Trans portation System, Inc., authorizing the transportation of property over and along the route and/or routes described in said certificates, be, arid the same are hereby, cancelled and revoked, on account of its failure to provide adequate service over said routes in violation of the Motor Carrier Acts of 1931, as amended, and the Rules and Regulations of the Commission.

ORDERED FURTHER: That this order become effective on December 1,
1966, for acceptance of intrastate shipments, and December 10, 1966, for delivery of all intrastate shipments accepted by it prior to Deeember 1, 1966,

BY ORDER OF THE GEORGIA PUBLIC SERVICE COMMISSION, this the 21st day of November, 1966.

A. 0. RANDALL, SECRETARY

CRAWFORD L. PILCHER, CHAIRMAN

-31-

Sheet 1 APPENDIX A
to D o c k e t 3 2 2 5 -M

COMPARISON OP NUMBER OP INTRASTATE SHIPMENTS HANDLED BY WATSON-WILSON TRANSPORTATION SYSTEM POR THE MONTHS OP SEPTEMBER, OCTOBER an d NOVEM BER, 1 9 6 4 WITH THE NUMBER HANDLED DURING THE MONTHS OP APRIL,MAY, JUNE ________________________ JULY AUGUST AND SEPTEMBER, 1 9 6 6 , _________________________

TOM A ppling Athens A u g u sta Bethlehem B on eville B o g art B razelton C olbert D earing D an ielsville Evans E lb e rto n P o rt Gordon Fran k lin Springs G rovetow n H artw ell H arlem Hephsibah H oschton Law ren cevilie Lincoln ton L e x in g to n M artinez Monroe R o y sto n Statham P aradise V alley Stone M ountain Thomson T ign all W ashington W atk insville W hitehall W inder

S ep t,
-
73 90
-
-
-
-
-
-
-
73
-
1
b -
2
5

1 9 O ct.
30

6 4 Nov.
38

NUMBER OP OUTBOUND SHIPMENTS HANDLED

19 66

fcOTAL

A p r i l May Ju n e J u l y

0

1

-

-

T

ibi

3

-

2

-

-

-

90

-

-

-

-

-

-

0

-

-

-

-

--

0

-

-

-

-

Aug. S e p t.

-

-

-

-

1

-

- -

-

-

-

-

0

-

-

0

-

-

-

-

-

-

-

-

r-

-

-

-

0

-

-

-

-

-

-

-

-

0

-

-

0

--

0

--

0

-

-

-

-

-

-

-

-- -

-

-

-

-- -

-

-

-- -

--

0

-

-

-

-- -

--

0

-

-

-

-- -

--

0

-

-

-

-- -

20

31

12b

--

0

--

0

--

1

5

3

1

3

2

1

-

-

-

-- -

-

-

-

-- -

-

-

-

* * *

--

0

--

0

*

-

0

1-

1

--

0

--

0

-

1

1

1

-

-

--

-

-

-

-- -

-

-

-

-- -

1

-

-

-- -

-

-

-

-- -

-

-

-

-- -

-

-

-

-- -

1

2

3

-

-

-

-- -

--

0

1

-

-

--

-

-

-

b

--

0

-

-

-

-

-

-

-

-. -

-- -

--

0

--

0

1-

3

2

1

8

-

-

-

-- -

1

-

-

-- -

1

*

-

- -

-

-

-

-- -

TOTAL 1 5 1 0 0 0 0 0 0 0 0
0
0 0 0
15
0 0 0 1 0 0 1 0 0 0 0 1
0 0
0 1 1 0

TOTAL

2^8

55

73

376

lH

3

3

3

3

1

27

32.

Sheet 2 APPENDIX A
to D o c k e t 5 2 2 5 -M

COMPARISON OP NUMBER OP INTRASTATE SHIPMENTS HANDLED BY WATSON-WILSON

196k TRANSPORTATION SYSTEM FOR THE MONTHS OP SEPTEMBER, OCTOBER and NOVEM

BER,

WITH THE NUMBER HANDLED DURING THE MONTHS OP APRIL,MAY, JUNE

___________________ JU L Y , AUGUST AND SEPTEMBER, 1 9 6 6 . ______________________________

TOM Appling Athens
Augusta
Bethlehem Boneville Bogart Brazelton Colbert Dearing Danielsville Evans E lb e rto n P o rt Gordon F ran k lin Springs G rovetow n H artw ell H arlem H ep hzib ah H oschton L aw ren cevllle Lineoln to n L e x in g to n M artinez Monroe R o y sto n S ta th a m Parad ise V alley Stone M ountain Thomson T ign ali W ashington W atk insville W hitehall W inder

Sept,

NUMBER OP 1 9 64 Oct, Nov. TOTAL

INBOUND SHIPMENTS HANDLED i966
April May June July. Aug, Sept.

1*

3

3

10

19

10

18

1*7

51

3

h

58

1*

1

6

1

6

2

2

2

1

2

1*

2

1

2

1

-

1

1

8

5

9

22

-

1

-

1

-

1

-

-

-

-

-

-

1

-

-

1

-

1

-

-

-

-

-

23

18

16

57

-

-

1

1

2

1

-

1

1

1

-

-

-

-

-

-

3

-

3

-

1

-

1

3

-

-

3

1

2

1

k

-

-

-

-

-

-

-

-

-

-

-

2

-

-

-

-

-

-

-

-

3

-

-

3

-

1

-

1

1

-

-

1

ho

27

112

-

1

-

1

1

-

-

-

1

-

-

-

-

-

-

-

-

-

-

1

-

-

-

-

-

-

-

-

-

1

-

-

1

13

10

7 r

30

-

-

1

1

-

1

-

-

-

1

-

1

1

1

-

-

-

-

-

1

-

-

1

1

-

1

-

3

-

-

1

1

7

-

h

11

1

1

-

2

-

1

1

2

-

2

-

2

-

-

-

-

-

1

1

1

-

3

-

-

-

-

1

-

-

-

-

1

-

-

-

1

-

-

-

-

0

-

-

-

-

-

-

-

-

0

3

1

-

1*

3

h

h

11

-

3

-

3

-

-

-

-

-

1

-

-

-

-

1

2

1

1

2

1

-

-

1

1

-

-

-

0

-

-

2

2

-

-

-

-

-

-

-

-

-

-

3

-

-

3

1

2

-

1

2

TOTAL 12 16 11 1 1 0 6 0 0 0 2 0 2 0 0 1 0 1 1* 0
5 0 6 1 1 1 0 0 1 7 3 0 0 6

TOTAL

190

Ill

99

1*00

27

a

11

1 1 10

15

88

33-

UTILITIES DIVISION
The Utilities Division is presently staffed with a Director, two engineers, two accountants, and six persons working in a secretarial or clerical capacity. The work of this division, under the direction and supervision of the Commission and its Secretary consists generally of processing the rate and tariff filings of all public utilities, and the evaluation of the same for presentation to the Commission. More specifically, activities include examining the books of accounts of public utilities; preparing and maintaining maps showing the certifi cated service areas and main transmission and distribution lines of utilities; investigating and processing complaints, including field investigations, and holding hearings when necessary; analyzing exhibits submitted at public hearings; studying and evaluating rate filings for the purpose of maintaining an equitable relation in the rate structures of comparable utilities; reviewing proposed issuances of securities and applications for loans; assisting the Commission in drafting and writing memorandum opinions, findings and orders; and reviewing Federal Power Commission and Federal Communications Commission materials and evaluating their effect on Georgia public utility operations.
In order to properly carry out the duties assigned to it by the Commission, this division must come in contact with every segment of the public, including individual citizens, industry representatives, national and other state regulatory bodies, legal, engineering, invest ment and brokerage firms, and numerous information and communications media. The files, library, and equipment of the division must be com plete, accurate, and available so that each application, complaint, court appeal, territorial question or dispute, rate consideration or problem may be handled quickly, equitably and in the public interest.

OPERATING UTILITIES

At the close of the calendar year 1966, there were under juris diction of the Public Service Commission the following number of public
utilities

Electric

2

Natural Gas

k

Telephone (including four cooperatives) 51

Telegraph

1

Transit

3

*lpor a complete list of utility companies operating in Georgia see Appendix ''A".
-3U-

DECISIONS AND ORDERS
Applications formally heard by the Commission are generally taken under advisement and decisions thereon are issued at a later date. The Commission issued 91 decisions and orders during the year in proceedings involving utilities. A classification of the proceedings in which formal opinions and orders were issued follows:

Applications for Certificates or Cancellation Thereof__- ________ 10

Applications for Authority to Issue Securities or Borrow Money

Rural Electrification Administration Financing_________

8

Private Financing -

10

Rate Adjustment Proceedings---------------------------

15

Applications for Authority to Purchase and Transfer Utility

Properties

k

Applications for Amendments of Certificates -

8

Show Cause Proceedings -

.......i

General Orders

-35-

GAS U T I L I T I E S
GENERAL
From 1920 to the present the population of the United States has increased 1.8 times; the use of energy has increased 2.5 times; the use of natural gas has increased 19 times. Today, natural gas supplies nearly a third of the nation*s energy.
Along with the increase in the use of energy has come the concept of "Total energy." In gas total energy, heating, and air conditioning are pro vided by reclaiming normally wasted heat from a gas-fired turbine or engine. In addition to a turbine or engine, generators, switchgear and heat recovery equipment are required. The thermal efficiency of total energy can approach, and exceed, 80 per cent - compared with an efficiency of less than 1+0 per cent for the most efficient conventional steam-electric cycle in a central plant.
Although total energy systems have been on the market for a number of years, and have been promoted vigorously by the gas industry, oil and equipment companies for about five years, the concept was slow in gaining acceptance. How ever, there are about 330 gas total-energy systems in operation today and the number is increasing rapidly. (The first high-rise office building in our state to employ a total gas system will be completed during 1967 and occupied in part by the Atlanta Gas Light Company.) Industry estimates indicate that by 1967 there will be 1+00 total energy plants in operation, and by 19 77 this market could account for 7*5 per cent of the rapidly growing power market.
In summary, while the gas industry is seizing the initiative in the total energy field, its efforts do not stop there. Plans are to protect its position of dominance in the basic house-heating market and to re-establish a profitable gaslight load. A massive assault is being planned on the air-conditioning market with an entirely new concept in small tonnage cooling that will give advantages that no existing hardware can offer. Researchers have forecast the field testing of fuel cell batteries by 1969 and their commercial availability in domestic and industrial installations by 1972. Finally, the way is open to natural gas as the preferential fuel for the projected Mach. 3 air vehicles of the future. It seems clear that all segments of the gas industry are acting aggressively to translate today*s opportunities into tomorrow*s realities.
SAFETY
The Federal Power Commission is presently urging Congress to give it authori ty to prescribe safety standards for construction and operation of gas pipelines. Chairman White has gone on record in support of S. 1553 and HR 5872 which measure; would amend Section 7 of the Natural Gas Act to add a new subsection as follows:
"(i) The Commission is authorized to prescribe such standards, rules, regulations, restrictions, conditions, or orders with respect to the construction, extension, operation, and maintenance of pipeline trans portation facilities of natural gas companies as, in its opinion, are necessary for the promotion of safety."
In an attempt to improve the state regulatory effort in this very vital area, the Chairman of the NAJRUC Committee on Gas, J. Davis Francis, is urgently recom mending that all states adopt as a minimum the ASA B-31.8-1963 Code pertaining to gas transmission pipeline safety and as soon as possible modify and strengthen the code as may be applicable. This code is basically a guide and standard for the gas industry written under the sponsorship of the American Society of Mechanical
-*3 6 -

Engineers and is intended to provide a consensus of informed engineering judgment as to minimum construction, operation, and maintenance requirements for safety.
At the present time no Federal body prescribes uniform minimum standards for pipeline design, construction, testing and maintenance. However, assuming that ultimately there is enactment of a Federal measure, this Commission feels that the states could stifle the impetus for a strong FFC role by adopting the ASA code and by supporting an amended measure which would specifically and precisely preserve unto the states the authority to impose regulations additional to any "standards" the FFC might promulgate. In this connection a bill will be prepared for intro duction at the next session of The General Assembly requesting authority to pre scribe rules and regulations for the safe installation and operation of all natural gas transmission and distribution facilities within the state of Georgia,
ATLANTA. GAS LIGHT COMPANY
Expansions
On January 31* 1966, Atlanta Gas Light Company merged with Savannah Gas Company, serving a monthly average of 34,341 customers in Savannah and 7 other communities in Chatham, Effingham and Bryan Counties, Following this merger Atlanta acquires the assets of St, Augustine Gas Service, Inc,, a small liquefied gas operation.
Service in the Northwest Georgia expansion project north of Athens was begun on April 29 with the turn-on of gas in Cornelia. Currently, work is underway to extend the line farther north to Clarkesville. In the extreme northwest corner of the state the communities of Ringgold and Trenton were served in August and November respectively. As a continuing part of the major expansion project into southeast Georgia begun three years ago, the company extended service to three small communities, opened two new offices and added many new customers in towns already served. In summary, during the year the company extended service to ten communities, opened two new offices and added many new customers in towns already served. In summary, during the year the compary extended service to ten communi ties and acquired eleven others by purchase and merger to bring the total number of customers served on September 30, 1966, to 520,548.
Construction
During fiscal year 1966, expenditures for utility plant construction and retirements were $15,821,705. In addition, acquisition of other distribution systems and equipment cost $534,919 making a total expenditure for the year of $16,356,624. Of the amount expended for construction and retirements, approxi mately 94$ was for gas mains, service lines, meters and regulators, and the balance for general improvements and new equipment.
The company estimates construction expenditures for the 1967 fiscal year at $16 ,78 3 *000, of which $8 ,307>000 will be for new business in areas presently served and $4,903,000 for distribution systems in new areas. This latter includes tie-ins to new transmission lines of two of the companyfs gas suppliers, Southern Natural Gas Company and Transcontinental Gas Pipe Line Corporation. Other esti mated expenditures total $3 *573*000 for data processing equipment, gas turbines anr related equipment for the new Gas Light Tower building, and for general improve ments and equipment.
Refunds and Rate Reductions
Also during the year $907*233 ih refunds from the company's pipeline suppliers was passed on to the customers. (See Appendix "C")
-37-

On January 1, 1966, a reduction estimated to be $32,728 per year was made to the Warrenton and Gibson customers, and on April 1, a reduction estimated to be $60,552 per year was made to customers acquired from Mid-Georgia Natural Gas Com pany in 1964. (Resulting from availability of general rates). On May 1 new rate schedules were filed for three classes of Savannah customers with an estimated reduction to $343,450 per year.
Statistical Summary
Gross operating revenues for the company increased $9,754,605 in 1966, for a total gross operating revenue of $99,092,894. Operation and maintenance expenses for 1966 totaled $77,027,862, an increase of 9*9$ over 1965* Of the total 76.7$ was cost of gas, 20.2$ other operation expenses and 3 *1$ maintenance expenses. Net income was up 16.2$ to a combined total of $6,638,553 (64$ greater than in 1961). Earnings per common share increased from $1.29 in 1965 to $1.47 per share in 1966. The company had a net gain of 15 employees in 1966 bringing total full time employment to 2,3 3 7 * Gas sold to customers totaled 1,631,488 therms, an increase of approximately 12$ over 1965, for an average cost to the company of 3*6 cents per therm. (See Appendix "B" for general five year statistics)
GAS LIGHT COMPANY OF COLUMBUS
Property Additions
Gross additions to property for the year amounted to almost $650,000. Included in this amount was $191,000 for completion of a new office building and $108,000 for completion of an addition to the Whitesville Road peak sharing plant which increased daily capacity by 50 per cent.
Mains and service lines and other facilities to provide service to 1,196 new customers added during the year required expenditure of $239,000. This was the smallest number of customers added in any year during the past ten. The sharp drop in new residential construction in the Columbus area not only reflects the national trend because of the high cost of financing, but also a lower demand for housing by military personnel stationed at Fort Benning. Because of the present low level of activity in home construction only 1,200 new customers are antici pated to be served in fiscal year 1967*
Sales and Revenue
The average number of residential customers billed during the year was 1,407 less than in the previous year despite some 1,19 6 new customers added during 1966. Losing these customers reduced the company^ revenue for the year an estimated $225, 0 0 0 .
Weather during the heating season, which was about 6 per cent colder than normal, just about offset the reduced residential sales volume but did not make up for all of the loss in revenue because increased usage per customer is billed at the lower priced steps in the rate schedule. With no change in rates during the year, average residential revenue per MCF sold during 1966 was $1.02 as compared with $1.04 received in 1965*
In spite of intense competition appliance sales of $336,000 were about 5 per cent above last year. Air conditioning sales continue to be encouraging and the company has reason to believe that more competitively priced equipment will soon be available in order that more significant gains may be made in the growing residential air condition market.
-38-

Statistical Summary Gross operating revenues for the company increased $32,008 in 1966 for a total gross operating revenue of $6,389,520. Cost of purchased gas, which accounted for almost 55 cents of each dollar of revenue received in 1966 in creased $110,000 (3.3 per cent) over the previous year. Payroll and other employee benefit expenses were up almost 10 per cent over 1965. Earnings avail able for common stock for the year amounted to $2.00 per share. This represents a decrease from the $2.41 earnings level in 1965. (See Appendix "B" for"general five year statistics)
-39-

TELEPHONE UTILITIES
GENERAL
Two strong currents prevailed over the communication industry during 1966 and produced what must be considered a notable record of growth and development.
First, the industry had to serve an increasing proportion of an expanding population. The number of young people in the 20 to 29 age group increased last year at a rate more than three times as great as that registered in the i960 1965 period. These young people as they set out on marriage, family formation and career employment, exerted a strong demand for new and improved services and these demands are expected to increase at an unprecedented rate in the years ahead.
However, the impact of greater population upon the communication industry was not confined to the young alone. Older persons were demanding new and im proved services during 1966 and were more able to pay for the services than ever before. At present time there are approximately 18 million people over 65 in the United States and in another 10 years it is estimated there will be nearly 21 million. In the years ahead the economic weight of these people will be more significant due to increased private pensions, social security, medicare and other programs.
According to the Bureau of the Census, the continuing population explosion will increase the U. S. population total from last year's 195 million to 209 million by 1970, and to over 2k5 million by 1980. During that same period, the Department of Commerce has forecast that the number of telephones per 100 citi zens will rise from ^5 in 1965 to 57 in 1970, and to more than 70 in 1980. This projection would mean that in the 15 years immediately ahead, the nation's total number of telephones will almost double -- from a 1965 actual of 9 3.6 million to beyond 172 million in 1980. Thus it seems evident that the telephone industry is just now entering its period of greatest growth, with this growth being tied directly to population, and must exercise considerable judgment in the formula tion of its long range plans to meet service demands.
Turning now from the matter of growth in demand for basic services, the second current which moved in a dramatic manner during 1966 was that of demand for new services. The growing needs of business, government and other large organizations have required that the industry develop such special services as high speed data transmission, private line services, private line switching systems, 100-word-per-minute teletypewriter service, and wide area telephone service, just to mention a few. In addition to these service developments, increasing numbers of telephone companies are being called upon to provide facilities for the distribution of television programs, music, and weather reports.
While advances such as the above serve to meet today's requirements, developments must continue in order to satisfactorily serve the communications customer of the future. Work is underway to expand the uses of electronic switching, laser devices, and satellites. The introduction of sight to routine telephone service is receiving much attention and seems inevitable through tech nical improvements and adaptations of the videophone. The expansions of CATV service is utilizing a rapidly increasing number of miles of telephone lines, and the potentialities of coaxial cable transmission of signals which are now crowding the capacities of radio frequencies are under constant study.
In conclusion it would seem that the implication for the future is clear. Requirements for sending, receiving, handling, storing, retrieving, and display-

ing information will steadily grow. The task of anticipating change and keeping ahead of it will require considerable effort, ingenuity, and teamwork, but one of the basic hallmarks of the telephone industry has been its dedication to public service and its determination to keep up with the changing times.
STATE ACTIVITIES
The telephone service was provided in Georgia during 1966 by k6 investorowned companies and four cooperatives, At the end of the year, there were approx imately 1 .8 million telephones in service within the state, of which slightly over 1.5 million were served by Southern Bell Telephone and Telegraph Company. The remaining 250,000 stations were served by k7 independent telephone companies which operate 235 of the 37^ exchanges in the state. Southern Bell experienced a gain of approximately 105,629 stations of 7*2 per cent during the year, while the independents had an increase of 19,039 or 8.2 per cent.
Expansion activities of the telephone companies during 1966 continued at a record pace. Over $95 million of telephone plant was added with Southern Bell accounting for approximately $86 million. General Telephone of Georgia and General Telephone of Southeast led the independents, who as a group expended over $9 million for a new construction. Other independent companies very active in new construction work include Georgia State Telephone Company, Gray Haddock Telephone Company, Interstate Telephone Company, Plant Telephone Company, Planters Telephone Company, Progressive Rural Telephone Company, Public Service Telephone Company, Ringgold Telephone Company, South Georgia Telephone Company, and Stan dard Telephone Company.
SOUTHERN BELL TELEPHONE AM) TELEGRAPH COMPANY ACTIVITIES
Station Data
Total telephones in service for Southern Bell in Georgia at the end of 1966 were 1,5^,91^* This represents an increase in total telephones for the year of 105,631. The inward movement was k-5290h2 and the outward telephone movement was 3^6 ,565
The improvement in the service furnished to all customers continues and as of the end of the year 78 .8 per cent of the company*s residence customers had individual line service. This is the highest percentage of one-party line ser vice in the nine states that Southern Bell serves.
The number of families with telephones in Georgia served by Southern Bell continues to increase and now approximately 7 6 .5 per cent of all families have telephone service. New services and equipments are being developed on a continu ing basis in order to keep abreast of customer's needs for new and expanded service. This is evident by the seventy-six tariff filings that were made with the Georgia Public Service Commission during the past year.
Conversions
The Barnesville manual office was converted to dial operation during the year 1966. This brought the number of dial telephones in the State to 99.8 per cent of the total. Plans are underway to convert the remaining manual office, Madison, to dial service on July 16 , 1967*
Direct Distance Dialing
Of the total number of main services in Southern Bell in Georgia, 70.3 per cent now have access to the Direct Distance Dialing network and the company

is proceeding with plans to expand this service. The per cent customer-dialed long distance messages in 1966 was 2 3.8 per cent of the total messages.
Band Mileage During the year, the company inaugurated a more liberalized method of applying mileage charges for customers outside of the Base Rate Area in six exchanges, resulting in a savings of approximately $27**,000 annually to the customers in these exchanges. As of the end of 1966, 1*3.9 per cent of all ex changes now apply mileage charges on this liberalized basis. Eight-Party Elimination and Service Improvements in Suburban Areas During the year 1966, Southern Bell spent approximately $5,500,000 in the gross construction in its program of eliminating eight-party service and for service improvements in the suburban area. During the year*, 5^,900 new customers were served outside the Base Rate Area and 2 ,56 7 eight-party customers were re graded to higher classes of service. At the end of the year, eight-party service represented only 3 .1*per cent of total customers served.
Extended Area Service During 1966, extended area service was established at Warner RobbinsPerry; Greenville-Luthersville5 Macon-Haddock; Wsynesboro-Sardis5 Tiffcon-LenoxQmega; Athens-Maxey and Greensboro-Maxey. Also, Loganville was brought into the Atlanta Metropolitan Service Area. There are 115 Southern Bell exchanges which can call one or more neighboring exchanges without paying a long distance charge. The Atlanta Metropolitan Calling Area is the largest flat rate calling area in the United States, encompassing over three thousand square miles.
Customer Savings Expansion of base rate areas during 1966 and a more liberal method of applying mileage charges resulted in annual savings to our customers of some $27^,0 0 0 . On April 1, 1966, a revised long distance message rate schedule was introduced which resulted in annual savings to Georgia telephone users of $1, 323,000.
- 1*2 -

mmmm

ELECTRIC UTILITIES
GENERAL
Of major concern during 1966 was the proposal before Congress that would establish a so-called Federal Electric Bank for the purpose of lending money at subsidized interest rates to rural electric cooperatives for "electric expansion."
President Johnson, in his Budget Message, told Congress that the administra tion was studying means for providing supplemental financing for REA. cooperatives; however, nothing was forthcoming until April, when Secretary of Agriculture Freeman transmitted a draft bill for congressional consideration. Following the administration^ plan came several other supplemental financing proposals and in particular HR ll+OOO by the vice chairman of the House Agriculture Committee, Representative Foage. The various proposals have same differences but they agree in basic principles on three points:
(1) There would be the continuation of presently existing 2 per cent interest loans, annually appropriated by Congress for those electric systems which could not afford to pay more.
(2) There would be established a new "intermediate" loan program. The interest rates for these loans would be keyed to the cost of money to the government, but with a predetermined maximum rate of interest.
(3) The third type of loans which would be available have been termed as "developmental" loans. These would be made to those rural systems that could afford them and generally speaking the interest level would be pegged to cost of money on the private market.
To carry out these loan programs, a federal bank would be established and governed by a board of directors under the general supervision of the Secretary of Agriculture. Capitalization for the banks would be provided by four princi pal sources -- funds from the federal government, which would be completely retired; mandatory and voluntary investments by borrows; monies obtained from the sale of bonds, etc., on the open market; and from bank earnings.
With the closing of the second session of the 89th Congress the investorowned electric companies were successful in their efforts to halt the establish ment of a new Federal Electric Bank. However, both Senate and House members are expected to reintroduce blocked bills in the new Congress so that supplemental financing for REA cooperatives cannot be considered a dead issue.
OPERATING STATISTICS
Customer Growth
The number of customers served by the Georgia Power Company and the Savannah Electric and Power Company continued to increase in 1966, with the total reaching 9k0955& by the end of the year. The increase amounted to 30,721 cus tomers, a percentage gain of 3 ^ over the number served at the end of the previous year. The largest numerical gain was in the residential class in which 28,190 new customers were added.
-1 + 3 -

Energy Sales
Energy sales for 1966 increased almost two billion kilowatt-hours, another record year for the state*s two investor-owned electric companies. Total sales climbed to 20,6 7 k,1 1 5 5000 kilowatt-hours from 1 8 ,719 ,878,000 the previous high, which was recorded in 1965. The 1966 total was an increase of 1,95^,237,000 kilowatt-hours, or 10.1+ per cent more than was sold in 1985 The percentage gain was almost three times greater than the percentage rise in number of new customers indicating greater use of electricity per customer. (A portion of the increase is attributed to population growth and to the growth in the number of businesses and industries; however, there has been a large rise in the average annual usage of electric power as evidenced by Chart l).
Price Trend
The unit price for electric service from The Georgia Power Company and the Savannah Electric and Power Company continued its downward trend in 1966, de spite the fact that the cost of most goods and services continued to increase throughout the nation. Residential customers of Georgia Power paid an average of 1.7 cents per kilowatt-hour for electricity during the year. That was a one per cent decrease from the 1965 average price and was 2 2 ,7 per cent below the national average price. Savannah Electric's residential customers paid an aver age of 2.08 cents per kilowatt-hour during 1966, down from a 19^5 level of 2 .12 cents per kilowatt-hour. (An eleven-year review for both companies shown in Chart 2).
Company Construction and Operation
Georgia Power:
During 1966 a record outlay of $113,83^,872 was required for the construc tion of new electric facilities. Transmission and distribution facilities required almost 82 million with the balance going for new generating plants (primarily Plant Harllee Branch - 129.2 million). Of the 1,300 miles of new lines built during 1966, 61+0 miles were transmission lines and 6 5 k miles were distribution lines. In an effort to meet anticipated demand, the company ex pects to install 1 ,289,000 kilowatts of additional generating capacity within the next three-year period and to construct 1 ,2 3 7 miles of transmission lines and 1,86 0 miles of distribution lines.
Savannah Electric:
Requirements for construction amounted to approximately 2.1 million, well below the 1+.5 million invested by the company in 196 5. During 1966 there was only a m.i1 amount of construction on major transmission projects and no work on new production facilities.
SALES ACTIVITIES
Georgia Power
Promotional and advertising efforts of the company produced notable gains in 1966, The percentage increase for total-electric homes and apartments (new and conversions) over 1965 came to almost 27 per cent. To be more specific, 9 ,31+9 total-electric homes and apartments were added during the year, compared to
-k k -

7j3&6 additions in 1965* This broughtthe number of total-electric residential customers to 3^ ,19 1 at year*s end.
During 1966, a total of 29,817 residential customers participated in the company*s wiring plan - a program whereby the company pays for and owns certain heavy-duty service entrance facilities in homes of customer qualifying under the plan. The activity resulted directly in the addition of 20,909 electric ranges, 11,0 56 water heaters, 5,7 ^ residential customers have wired or rewired their homes under the company*s wiring plan since the program began in i960. (777 mobile home park spaces were wired or rewired in 1966 under the wiring program the first full year in which the plan was available to mobile heme parks).
Industrial power contracts, negotiated through the industrial sales depart ment in 1966, increased the company*s load by 500,128 kilowatts. This was the second consecutive year that load from new industrial power contracts more than doubled that added in the previous year. Equally impressive for 1966 were the 1,182 electric heating installations for commercial buildings. As a result of this effort the company continues to hold its national lead in the number of all electric commercial buildings as well as in the number of commercial buildings heated electrically.
Savannah Electric and Power Company New home construction in the company*s service axea amounted to 512 single family units during 1966, of which 198 units were Total Electric homes. At the end of the year the company had a total connected load of 36 ,32 1 KW in fixed space heating, an increase of kO per cent over 1965# More all-electric buildings were added to the company*s lines in 1966 than in any other year. The electric heating load added in this classification totaled 800 KW and more'than doubled the heating load added during the previ ous year.
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RESIDENTIAL SALES DATA KILOWATT- HOURS

RESIDENTIAL SALES RATES

DATA

SAV. ELECTRIC GA. POWER

'55 '56 '57 '58 '59 '60 '61 62 '63 '64 *65 66
CHART 2

GENERAL INVESTIGATION OF SERVICE RATES AND PROMOTIONAL PRACTICES OF ELECTRIC AND GAS UTILITIES
As a result of complaints and petitions received by the Commission on certain rates, promotional practices, and allowances of the Georgia Fewer Company, and counter complaints from the Georgia Power Company, on November 29, 1966, a general investigation was ordered to include all rates, promotional practices and allowances of Georgia Power Company, Atlanta Gas Light Company and Gas Light Company of Columbus.
This general order was the result of a hearing before the Commission on October 18, 1966, in Docket No. 2015-U on complaint filed by Frank & L. L. Cheek, owners of the Northeast Garden Apartments, in which it was alleged that Georgia Power Company had not applied the most economical rates to this apartment com plex, and further that the company's residential wiring plan and promotional allowances were discriminatory. Major intervenors at this hearing included: Atlanta Gas Light Company, Gas Light Company of Columbus, Georgia L. P. Gas Association, Georgia Oil Jobbers Association, City of Austell, and Robert P. Grey, Consulting Engineer for eleven (ll) municipalities.
In general terms, the electric utilities feel that promotional rates allowances and practices are desirable and in the public interest because they stimulate the use of electricity, which is a prerequisite for low rates. They assert that the uses of electricity which are promoted bring high revenues in relation to costs, and further that the allowances are not discriminatory be cause their benefits are available to all customers who meet the objective requirements. Finally, they contend that the size of the allowances and costs of other promotional practices are not large enough to impose a burden on custo mers in other classes, but rather are recovered in a reasonably short period of time to the ultimate benefit of all users.
The gas utilities, on the other hand, contend that electric promotional rates and allowances are unjustly discriminatory in that they confer benefits upon some customers and deny those benefits to others within the same general classification. They allege that the revenues generated as a result of the challenged promotions are insufficient to permit the electric companies to re cover those costs in a reasonable time and that they are, therefore, discrimina tory. Finally, they conclude that the public interest requires that all cash allowances and similar inducements be prohibited and promotional rates be with drawn.
Basically the general investigation (set to begin on March 21, 196 7) will embrace the following:
(a) What rates, promotional practices, and allowances are offered, used or followed by the public utilities who are parties to this proceeding in connection with the furnishing or the offer to furnish in Georgia of either electric energy or gas for heat, light, or power or other purposes;
(b) Whether said electric and gas rates, promotional practices, and allowances are in violation of the laws of Georgia or the rules and regulations of this Commission;
(c) Whether said electric and gks*'rates, promotional practices, and allowances are fair, equitable and nondiscriminatory;
-k6-

(d) What action, if any, should be taken by the Commission in the public interest with respect to any such rates, promotional practices, and allowances.
For the interested public this investigation should serve to focus on the Commissions various rate-making practices, policies, and philosophies and the underlying reasons for the particular policies and philosophies employed by the agency in carrying out its functions and duties.

APPLICATION FOP CERTIFICATES OR CANCELLATION THEREOF

Docket No, I96O-U Application of the City of Commerce, Georgia, for a

March 30, 1966

Certificate of Public Convenience and Necessity for the op

eration of a natural gas distribution system in Banks County.

Docket No. 1977-U Application of the City of Thomson, Georgia, for a Certifi

March 30, 1966

cate of Public Convenience and Necessity for the operation

of a natural gas distribution system in Jefferson, Glascock

and Warren Counties.

Docket No. I998-U Application of Atlanta Gas Light Company for a Certificate

June 17, 1966

of Public Convenience and Necessity for the operation of a

natural gas distribution system in Taliaferro County.

Docket No. 1996-U Application of Atlanta Gas Light Company and United Cities

July 25, 1966

Gas Company for Distribution System Certificate of Public

Convenience and Necessity in Hall County.

Docket No. 2006-U Application of United Cities Gas Company for a Distribution

July 25, 1966

System Certificate of Public Convenience and Necessity in

Jackson County.

Docket No. 2008-U August 29, 1966

Application of the City of Buford for change in Certificate of Public Convenience and Necessity by cancelling Pipeline Certificate No. 15 and issuing in lieu thereof Distribution System Certificate No. 121 authorizing the construction and operation of a gas distribution system in Hall County.

Docket No. 2016-U Application of City of Louisville for Certificate of Public September 29, 1966 Convenience and Necessity for the operation of a pipe line
in Glascock County.

Docket No. 1836-U Application of the City of Warner Robins for a Certificate of October 27, 1966 Public Convenience and Necessity for Twiggs County - First
Supplemental Order.

Docket No. 2025-U November 29, 1966

Application of Atlanta Gas Light Company for requisite authority to purchase and acquire certain assets of Inter coastal Gas Corporation, for the transfer of rights under Certificates of Public Convenience and Necessity in Gordon, Murray and Gilmer Counties, for the issuance of such Certif icates in Murray and Gilmer Counties and for the amendment of existing such Certificates in Gordon and Bartow Counties Distribution System Certificate No. 12^ and Distribution System Certificate No. 123.

Docket No. 2012-U Application of South Georgia Telephone Company, Inc., for a October k , 1966 Certificate of Public Convenience and Necessity to establish
a new exchange.

APPLICATION FOR AUTHORITY TO ISSUE SECURITIES OR BORROW MONEY

Docket No. 1962-U Application of South Georgia Telephone Company for authority January 1.8, 1966 to b o r r o w $1,601,000 from the Rural Electrification Adminis
tration.

Non-Docket February 1, 1966

Application of Empire Telephone Company for authority to borrow an additional $99,000 principal amount from the Rural Electrification Administration.

Docket No. 1989-U March 30, 1966

Application of Glenwood Telephone Company for authority to borrow a total of $33,000 principal amount from StrombergCarlson Company, a Division of General Dynamics Corporation, with such borrowing to bear interest at the rate of six per cent (6$) per annum.

Non-Docket April 25, 1966

Application of Statesboro Telephone Company, Statesboro, Georgia, for authority to issue and sell First Mortgage 20-year Serial Bonds in the principal amount of $400,000, to bear interest at the rate of 6^- per annum.

Docket No. 1995-U May 2, 1966

Application of Westco Telephone Company for authority to borrow the principal amount of $576,000 from the Rural Electrification Administration, as well as authority to issue and sell 28,800 shares of its Common Stock to Western Caro lina Telephone Compary.

Docket No. 2000-U Application of Trenton Telephone Company for authority to

May 26, 1966

borrow the principal amount of $745,000 from the Rural

Electrification Administration.

Non-Docket May 26, 1966

Application of Alma Telephone Company, Inc., for authority to borrow an additional $157,000 principal amount from the Rural Electrification Administration.

Non-Docket June 9, 1966

Application of Interstate Telephone Company, West Point, Georgia, for authority to borrow an additional $200,000 principal amount from the Stromberg-Carlson Corporation.

Docket No. 1994-U Application of Planters Rural Telephone Cooperative, Inc.,

June 23, 1966

for authority to borrow the principal amount of $1 ,020,000

from the Rural Electrification Administration.

Docket No. 2003-U Application of Walker County Telephone Company for authority

July 19, 1966

to issue and sell First Mortgage Bonds, due December 1, 1992,

in the principal amount of $300,000, to bear interest at the

rate of per annum.

Docket No. 2005-U Application of Hawkinsville Telephone Company for authority

July 25, 1966

to borrow the principal amount of $300,000 from the

Stromberg-Carlson Corporation, Rochester, New York.

APPLICATION FOR AUTHORITY-TO ISSUE SECURITIES OR BORROW MOREY

Docket No. 2011-U Application of Pineland Telephone Cooperative, Inc., for

August 1 , 1966

authority to borrow from the Rural Electrification Adminis

tration the principal amount of $350,000 bearing interest

at the rate of 2ffo per annum.

Non-Docket

Application of Chickamauga Telephone Corporation for authori

September l6 , 1966 ty to issue 1,125 shares of Caramon Stock "Nunc Pro Tunc."

Docket No. 2017-U Application of Nelson-Ball Ground Telephone Company for December 16 , 1966 authority to borrow $575*000 from the Rural Electrification
Administration.

Docket No. 2022-U December 16 , 1966

Application of Thomaston Telephone Company, Thomaston, Geor gia, for authority to issue and sell a First Mortgage 28-year
Bond in the principal amount of $1,000,000, to bear interest at the rate of 6 3/hrfo per annum.

Docket No. 202k~\J December 2 1, 1966

Application of General Telephone Company cf the Southeast
for authority to issue and sell at par 360,000 shares of its $25 par value per share Common Stock; and to sell $12,000,000
principal amount of First Mortgage Bonds, and for other purposes

Docket No. 197^-U Application of Georgia Power Company for authority to issue January 18, 1966 and sell $50,500,000 principal amount of First Mortgage
Bonds, 90,000 shares of Preferred Stock and 1^0,000 shares of Common Stock.

Docket No. 1975-U Application of Atlanta Transit System, Inc., for authority to February 1 , 1966 incur long-term indebtedness in the principal amount of
$252,960.

-50-

RATE ADJUSTMENT PROCEEDINGS

Docket No. 1963-U Application of South Georgia Telephone Company for authority January 18, 1966 to adjust its rates for exchange telephone service.

Non?-Docket January 20, 1966

Commission directed all independent telephone companies operating toll centers to file revised intrastate message toll telephone rates which would reduce toll revenues by some $170 ,10 0 per annum.

Non-Docket January 20, 1966

Commission directed Southern Bell Telephone and Telegraph Compary to file reduced intrastate message toll telephone rates aggregating $1 ,323,329 per annum.

Docket No. 1990-U Application of Glenwood Telephone Company for authority to

March 30, 1966

adjust its rates for local exchange telephone service.

Docket No. 2001-U Application of Trenton Telephone Company for authority to

May 26, 1966

adjust its local exchange telephone rates.

Docket No. 1993-U Application of Planters Rural Telephone Cooperative, Inc.,

June 23, 1966

for authority to adjust its exchange telephone rates.

Docket No. 200MJ Application of Walker County Telephone Company for authority

July 25, 1966

to adjust its rates for local exchange telephone service.

Docket No. 2019-U Application of Southern Bell Telephone and Telegraph Company October li, 1966 for authority to adjust its local exchange rates for Tifton,
Georgia.

Docket No. 2021-U Application of Southern Bell Telephone and Telegraph Company
November 1, 1966 for authority to adjust its local exchange rates at Augusta, Harlem and Hephzibah, Georgia.

Docket No. 2020-U Application of Southern Bell Telephone and Telegraph Company
November 1, 1966 for authority to adjust its local exchange rates at Columbus and Cusseta, Georgia.

Docket No. 2028-U Application of Southern Bell Telephone and Telegraph Company
December 16, 1966 for authority to adjust its local exchange telephone rates at Lyons and Vidalia, Georgia.

Docket No. 2029-U Application of Southern Bell Telephone and Telegraph Company
December 16, 1966 for authority to adjust its local exchange telephone rates at Wrightsville, Georgia.

Docket No. 2030-U Application of Southern Bell Telephone and Telegraph Company
December 16, 1966 for authority to adjust its local exchange telephone rates at Jesup, Georgia.

Docket No. 1988-U Application of Columbus Transportation Company for authority

March 30, 1966

to adjust its adult passenger fares.

Docket No. 1992-U May 2, 1966

Application of Western Union Telegraph Company for authority to make effective in the State of Georgia selective intran state rate adjustments.
51-

APPLICATION FOR AUTHORITY TO PURCHASE AND TRANSFER UTILITY PROPERTY

Docket No. 196^-U Application of Atlanta Gas Light Compary for authority to

July 1, 1966

consummate a statutory merger with Savannah Gas Company; for

approval of issuances and exchange of securities and assump

tion of Bond in connection with such merger.

Docket No. 1959-U Application of Telephones, Inc., for authority to acquire January 5, 1966 all of the outstanding Capital Stock of Wayne Telephone Co.,
Inc.

Docket No. I976-U Application of Telephones, Inc., and Continental Telephone

March 1, 1966

Corporation for authority to consummate a statutory merger

whereby Continental Telephone Corporation will be the sur

viving Corporation.

Docket No. 2002-U June 23, 1966

Application of Cherokee Telephone Company, Inc., Homerville Telephone Company, Inc., Seminole Telephone Company, Inc., Sikes Telephone Co., and Dixie Telephone Company for authori ty to merge, with Dixie Telephone Company to be the surviving Corporation; as well as, application of Dixie Telephone Company for authority, as a part of such merger, to change its corporate name to -- "Georgia State Telephone Company."

-52-

APPLICATION FOR AMENDMENTS OF CERTIFICATES

Docket No. 1997-U Application of Atlanta Gas Light Company for amendment to

July 25, 1966

Distribution System Certificate of Public Convenience and

Necessity in Jackson County.

Docket No. 1999-U Application of United Cities Gas Company for amendment to

July 25, 1966

Distribution System Certificate of Public Convenience and

Necessity in Hall County -- Amendment No. 1.

Docket No. 2007-U Application of United Cities Gas Company for amendment to

July 25, 1966

Distribution System Certificate of Public Convenience and

Necessity in Hall County -- Amendment No. 2.

Docket No. 1996-U Application of Atlanta Gas Light Company for Distribution
October 1966 System Certificate of Public Convenience and Necessity in Hall County -- First Supplemental Order and Amendment No. 1.

Docket No. 1777-U Application of Coastal Utilities, Inc., for an amendment to

May 2, 1966

its Certificate of Public Convenience and Necessity for new

and additional telephone facilities to be constructed.

Docket No. 2013-U Application of South Georgia Telephone Company for an amend October 4, 1966 ment to its Certificate of Public Convenience and Necessity.

Docket No. 2009-U Application of General Telephone Company for an amendment to September 16 , 1966 its Certificate of Public Convenience and Necessity for new
and additional telephone facilities to be constructed in
Northwest Cherokee County.

Docket No. 2010-U Application of Fairmount Telephone Company, Inc., for an September 16 , 1966 amendment to its Certificate of Public Convenience and
Necessity for new and additional telephone facilities to be
constructed in Northwest Pickens County.

-53-

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SHOW CAUSE

Docket No* 201*+-U October 2k9 1966

Rule Nisi to all gas and electric companies rendering service within the State of Georgia to show cause why the Commission should not prescribe a uniform interest rate of Gj0 per annum on all customer deposits held by said utilities operating in the State of Georgia.

GENERAL ORDERS Docket No. 2027-U Investigation of rates, promotional practices and allowances November 29, 1966 of Georgia Power Company, Atlanta Gas Light Company and Gas
Light Company of Columbus. Docket No. 2027-U Investigation of rates, promotional practices and allowances December l6 , 1966 of Georgia Power Company, Atlanta Gas Light Company and Gas
Light Company of Columbus -- Order correcting General Order issued on November 29, 1966*
55-

SERVICE
The records of the Commission concerning utility customer complaints indicate that a decided trend has developed during the last few years toward a change in the nature of the complaints processed* In the late 1950*8, the majority of com plaints concerned themselves with the poor quality of service rendered by certain utilities* For this reason, a great deal of the time of the Commission*s staff was spent checking or testing various facilities of utility plant equipment such as gas meters and pressure regulators, electric watthour meters and voltage condi tions, and various plant facilities of the telephone industry* Due to improve ments in maintenance procedure and replacement of much of the older equipment, especially in the telephone plant, the quality of the service rendered has been continually on the upgrade. This is not intended to indicate that the problem has been completely resolved but that positive steps have been taken by the utilities to correct the situation.
The greater problem, however, is no longer "poor service" but one of provid ing sufficient new facilities to meet the ever increasing demand. The true extent of this deficiency is an unknown factof and has not reached serious proportions as yet. However, with the population growth anticipated in the future the util ities, especially the telephone industiy will be hard pressed to provide for the demand. It has already reached proportions in the large metropolitan areas where service applications for telephoned are delayed for periods of sixty to ninety days.
-56-

OTHER COMMISSION ACTIVITIES
As reported last year, regulatory agencies, both state and federal, have experienced considerable difficulty in maintaining an adequately trained techni cal staff* This has been due to the younger staff members leaving government employment to accept positions in industry which offer higher salaries and more challenging assignments* This condition is expressly true in the field of engineering and accounting and has now reached a critical stage. Research has indicated that there will be a critical shortage of engineers far beyond normal expectations by 1970. According to a study recently made by the "Engineering Manpower Commission of the Engineers Joint Council", New York, for the next 11 years, there will be a requirement of some 830,000 new college graduate engineers. This averages out to some 69,000 engineers every year and, of course, is deemed to be a conservative estimate in the face of an uncertain future. Despite the great demand, there will be only 500,000 graduate engineers available from the nations engineering schools during this 11 year period. Research has further shown that the reason for the decline in the number of engineering graduates is because high school graduates are going to liberal art schools where work is mu~h easier, although the pay is not as high. The various technical societies have embarked on the program to promote to a larger degree, interest in high school graduates entering the engineering educational field. Based on the present engineer graduating classes, graduate engineers are averaging approximately $700.00 per month to start with no experience whatsoever. Industry has caused the starting salary to be higher than in previous years since they need the potential employee and are willing to defray expenses in furthering their education in engineering. State agencies should offer summer employment to engineering students to get them interested in state government work so that by graduation time, some would have decided to accept employment in this area. This would depend upon how good a selling job is accomplished.
For many years now, the NARUC, of which this Commission is a member, has sponsored a short course for the development of commission personnel. The Commission's Chief Utilities Engineer is Chairman of this important national committee and prepared a national report to the sponsoring agencies giving an estimate of its success and other data. This report shows that in 1966, the training program experienced the largest class ever to attend such a short course. Twenty-one state commissions, two federal agencies and representatives from industry sent sixty-three representatives to the University of Wisconsin where the last short course was conducted. There were two commissioners and fifty-eight staff members from the state and federal agencies in attendance, and according to evaluation reports, each participant felt that the course met the objective of providing up-to-date knowledge in the legal, technical, account ing, financial and rate analyst fields. This Commission cannot, under the law, expend funds to send staff members to such short courses, however, an effort should be made and recommendations are being made to pass certain legislature that would permit expenditures for this purpose. This is a most important course of action because most young men going into a job for the first time after graduation from college expect to have presented to them, opportunities for further education at the expense of their employer. As far as this Commission's staff is concerned, every encouragement is given to further education via attend ance in legal, engineering and accounting schools at night as well as attendance at conferences and various types of workshops held in the state. Engineers and accountants are also encouraged to qualify themselves for registration in the state as professional engineers and certified public accountants.
-57-

The Commission has also participated in the NARUC Communications Problems Committee to bring about lower telephone rates throughout the state. This accom plishment has been brought about by the transfer of certain of Bell Company^ revenue requirements from intrastate to interstate. An offspring from this trans fer has been that the independent companies are able to obtain a greater per centage of the toll revenue which they produce and are somewhat less dependent upon local exchange revenue for maintaining a reasonable rate of return. Vice Chairman Ben T. Wiggins has served as Chairman of the NARUC Communications and Problems Committee for several years and has done an outstanding job. He is following the current Docket No. 16258 which is the FCC investigation of the rates for the American Telephone & Telegraph Company. It is expected that some decision will be reached during the third or fourth quarter of 1987* The Commissions Chief Utilities Engineer serves on the Staff Committee of Experts and assists in the work insofar as the technical details are concerned. These committees met on several occasions in 1966 to transact important business relating principally to changes resulting from the new NARUC Separations Manual. Another function of the Communications Problems Committee is the publication of a compilation of message toll telephone rates as well as local exchange rates that are effective throughout the United States.
-58-

WESTERN UNION
On March 1^, 1966, the Western Union Telegraph Company filed application with the Public Service Commission for authority to make certain adjustments to its intrastate tariff rates*
In summary, the evidence presented by Western Union at the hearing indicates that out of a total intrastate operating revenue of $870,97*+ for the year ending December 31j 196k, the company suffered a net deficit of $29>*+52. Further testi mony evidenced the fact that the company intends to begin a modernization and service improvement program which should result in improved service and a capturing of an additional fraction of the expanding telecommunications market. Basically, this expansion and improvement program appears to hinge on the replace ment of the message reperforator system with the company* s more versatile and modern telex system. An added advantage to this proposed change will be a reduc tion "fixed cost" of the new system.
The proposal made by the company would result in an average upward adjustment in the company* s tariff charges of approximately Jfo, This revision in the intrastate tariff corresponds to certain interstate rate revisions previously approved by the Federal Communications Commission which are to become effective on April 1, 1966.
The proposed increase in rates are to apply to:
1. An upward adjustment of 3% to be applied on the existing charges for the following services:
(a) Public, U. S. Government and Money Order messages in the Full-Rate Telegram, Day Letter and Night Letter classifications.
(b) Flat-Rate Personal Opinion messages.
(c) The per-message service charge applicable on Singing Greeting messages, on messages filed by telephone or messenger, and on confirmation copies of sent messages.
(d) Commercial News (CND) services for users other than the Press.
2. The establishment of an additional charge of 100 for collect service on each collect message other than a Press message.
3. An overall upward adjustment of approximately 10% in the schedule of Money Order charges.
4. An upward adjustment from present $.75 to proposed $1.00 in the service charge for each Tel(T)ex message, that is, for each message transmitted by Telex to the Telegraph Ccmpany*s office in the destination city for delivery.
5. The addition of a definition of "Press" in Commercial News (CND) service. The term "press" as used herein means press associations, news agencies,* radio networks, radio broadcasting stations, news papers, magazines, periodicals and other publications of general circulation which collect, disseminate, or publish general news for the information of the public. The term "general hews" includes
-59-

an account of current events, public announcements, information relating to finance, science, commerce, religion, civic, or other public organizations, and all like information of general public interest.
6. The addition of a provision relating to the rounding of fractional rates and charges in the CND section of the tariff, viz. -- when a rate involves a fraction of a cent, the fraction is carried through the entire computation of the charge for the service. When the charge so computed included a fraction of a cent, a fraction of less than one-half cent is disregarded and a fraction of one-half cent or more is treated as one cent.
The primary purpose of this rate adjustment would appear to be to improve the ability of the company to attract additional capital at a more favorable cost. According to the exhibits accompanying the evidence, the increased rates will not completely eliminate the intrastate operating deficit. The actual loss for the year 1964 of $29,452 when compared with proforma statement showing the new tariff charges would still result in a net intrastate operating deficit of $13,000. The Western Union Company, however, feels that with the implementa tion of its proposed program of modernization and improvement, the intrastate phase of the company1s operations can ultimately be made lucrative.
The Commission gave consideration to and approved the company's application on March 2, 1966. The increased rates became effective at 12:01 A.M. on June 1, 1966.
In keeping with the company's expanding offerings such as the Candygram and "instant gift" Dollygram in 1965, the company added two additional services in 1966 -- a Melodygram which consists of a small phonograph-type record in corporating various musical-greeting messages for special occasions such as birthdays, anniversaires, etc., and a Perfume-by-Wire message. An extensive advertising program is planned during the coming year to support the intensified marketing and promotion of these various public special offerings. It might also be noted that the company in connection with its advertising has adopted a new trademark. The trademark consists of the compary's initials "WU" in a mod ern square block form symbolizing the compary* s position of leadership in the modern high-speed communication and information field. This new trademark will be standardized for universal identification throughout the Western Union offices and will appear on the company's stationary, equipment and other property. As part of their modernization program, the compary spent in excess of a million dollars on a major face-lifting of the Western Union office building in downtown Atlanta. The newly renovated building houses the local Atlanta telegraph operation and the administrative offices for the Alabama, Georgia and South Carolina area, in addition to other operating departments.
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Year 1962
119966k3
1965 1966
Year 1962 1963 1961* 1965 1966
Year 1962 1963 1964 1965 1966

APPENDIX "B"

Regulated Natural Gas System (Excluding Municipalities)

Gas Service Revenue (millions)

Number of Customers (thousands)

Residential

Commercial

429.0 448. 5 471.6
495.8 521.5

35.it 36.5 37.8 39.2 U0.9

Sales (millions of Mcf)

Amount 8O.O 89.O 95.5 96.5 IO60 3
Other 3.1 3.1 3.1 3.6 3.9
Total 122.4 133.2 146.3 150.I 167.3

-6l-

APPENDIX ,?C"

Analysis of Gas Refunds For The Year Ended December 31 1966.
Atlanta Gas Light Company
Balance January 1 1966 Add: Refunds received from suppliers net of increased cost of gas absorbed by Company Savannah Gas Compary balance unrefunded 1/
Amount Available for Refund Deduct: Amounts Refunded to Customers: Savannah Valdosta All Other
Total Refunds Balance Available for Refund December 31, 1966
Gas Light Company of Columbus
Balance January 1, 1966 Amounts Refunded to Customers Balance Available for Refund December 31 1966

$ 768,579 20,781* 139.988
$ 131*,530 13,6ll* 759.085
S 907,229
$ 18,122
$ 6^,691 6k92k6
$ 4*15

1/ * Merged with Atlanta Gas Light Company on January 31> 1966

TRANSPORTATION

General
During 1966, 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), +91 transportation rate and service matters, a considerable number of which required lengthy studies and investigations in the field.

FORMAL CASES FOR YEAR 1966

Docket No. Date

Subject

Disposition

575-K

1-5-66

Application of Central of Georgia Railway Company for further consideration of the Commission^ action of December 17> 19^ in denying authority to discontinue agency service at Gray

Denial of appli
cation affirmed with provision for review at expiration of additional 12 month test period

298I-M

1 -18-66 Amendment of Item 10 of General Motor Carrier Rule 8

Rule amended to exclude therefrom
"military tanks and tank re trievers, other
than scrap, weighing 60,000 pounds or more"

Supp. 298I-M

1-21-66

Amendment of Item 10 of General Motor Carrier Rule 8

Order of 1-18-66 clarified in its provision for
"gr andfather"right s

2725-M

2-18-66

Application of National Motor Dismissed for want Freight Traffic Association, of prosecution Inc., for authority to make
applicable on Georgia intra state traffic increased ratings contained in Items 48930-A through 49630-A; ^9700-A through ^9730-A; and I82220-A, 2003U0-A and 200380-A of Supplement 10 to National Motor Freight Classifi
cation A--7

Supp. 2725-M

3 -1-66

Petition of National Motor Freight Denied Traffic Association, Inc., for re instatement of its application dis missed on 2-18-66 for want of prosecution

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Docket No. Date

Supp. 3077-M

3-1-66

617- R 3-21-66

618- R 3-21-66

Supp, 3076- M 3077- M

3-21-66

617-R

3-30-66

3152-M I4--i|--66

619-R

U-6-66

FORMAL CASES FOR YEAR 1Q66 (Continued)

Sub,j ect

Disposition

Baggett Bulk Transport, Inc, for authority to increase rates on cement

Proceeding re opened and matter set down for further hearing

Application of Seaboard Air Line Railroad Company for au thority to discontinue the handling of intrastate lessthan-carload freight

Denied

Application of Seaboard Air

Approved, except

Line Railroad Company for au- as to Richmond

thority to discontinue the

Hill

Georgia stations of Stillwell,

Rincon, Riceboro, Jones, Richmond

Hill, Townsend, Cox, Waverly and

White Oak as flag stops for its

Passenger Trains Nos. 9 and 10

(The Palmland)

Application of Baggett Bulk Transport, Inc. and Schwerman Trucking Co. for authority to increase rates on cement

Proceeding dis missed upon filing of proposed lesser increases in rates

Application of Seaboard Air
Line Railroad Company seeking
extension of time to and in cluding April 11, 1966 in which to file petition for
reconsideration of the Com
mission's order of March 21, 1966

Approved

Amended application of Baggett Bulk Transport, Inc. and Schwerman Trucking Co. for increase in rates on cement

Approved after withdrawal of protests

Application of Southern Rail' way Company for authority to
discontinue its Passenger Trains 3^ and 35 between Atlanta, Georgia and the
Georgia-South Carolina
State Line

Approved subject to provision that Toccoa be made a flag stop for Trains V? and ^8

,

FORMAL CASES FOR YEAR I966 (Continued)

Docket No. Date

Subject

Disposition

Supp. 9509-A 2197-M 2246-M
319O-M

4-25-66 6-17-66

Associated Petroleum Carriers, Review insti

Inc., Fleet Transport Company, tuted of

Inc., Petroleum Carrier Corp. operations under

volume incentive rate plans on incentive rate

transportation of liquid

plan

petroleum products

Application of Georgia House Charge for travel

hold Goods Movers Association, time approved in

Inc. on behalf of its members Atlanta metro

and other carriers party to

politan area

Georgia Household Goods Tariff

Bureau Georgia Intrastate Tariff

GPSC-MF No. 5 seeking an emergency

increase in household goods rates

and charges

3155^
Supp, 9509-A 2197-M 2246-M

7-1-66 7 -25-66

Application of J. & M, Transporttion Co. Inc., Boyd Motor Lines, Inc. and W. D. Wingate Trucking Company for authority to increase rates on cotton

Approved

Application of Petroleum Carrier Corp., Associated Petroleum Carriers, Inc., and Fleet Transport Company for increase in minimum weights on petroleum products

Conditionally approved

Supp. 575-R
576-R

7-28-66 7 -28-66

Application of Central of Georgia Railway Company for authority to discontinue agency service at Gray

Approved

Application of Railway Express Agency, Inc., for authority to close the express office at Gray, contingent upon the closing of the railroad agency at that point

Approved

Supp. 602-R

10-4-66

Application of Georgia Railroad Extension apseeking authority to extend to proved December 31> 1967> or to eliminate, the expiration date prescribed by the Commission in its order of July 1, 1965 concerning rates on Boots and Shoes from Thomson to Forest Park

-65-

FORMAL CASES FOR YEAR 1966 (Continued)

Docket No. Date

Subject

Disposition

3173-M

10-2U-66

Application of National Motor Freight Traffic Association, Inc., seeking authority to make applicable on Georgia intrastate traffic increased ratings on certain textile products

Approved for publication as Georgia intra state classifi cation ratings

Supp. 602-R

11-1-66

Application of Brown Transport Approved Corp. for extension of expiration date in connection with rate on Boots or Shoes from Thomson to Forest Park

620-R

11-29-66

Application of Atlantic Coast Line Railroad Company for au thority to discontinue agency service at Stockton

Approved

Supp. 319O-M 625-R

12-8-66 Emergency Increases in House hold Goods Rates and Charges

12-16-66

Application of Southern Rail way Company for authority to discontinue agency service at Odum, to discontinue handling LCL freight at that point and to dismantle the station building at Odum

Expiration date of increases extended to June 30, 1967
Approved ef fective with opening of new Jesup agency

- 66-

BUS FARES AND SERVICES
At the end of 1966 there were Ul bus lines operating under the jurisdiction of this Commission providing intercity service between points in Georgia - an increase of 3 from the number so operating at the end of 1965. It' is interesting to note that even this increased figure is only about one-third of the number of bus lines operating in the State at the close of World War II.
In 1966 there was no general increase in the State's basic bus fare structure - the increase granted last year apparently having been sufficient to offset increased costs of operations during the year. As has been the case for a number of years, however, the real support of Georgia's comparatively low bus fare structure has been the sub stantial volume of bus express transported by the carriers in the State of Georgia, principally from Atlanta. It should be here noted that there has entered the field of transportation of small packages in the South a new type of carrier which the bus lines fear will capture a large volume of bus express traffic. This carrier, United Parcel Service, began operations interstate in six Southern States, including Georgia, in September of 1966 and the bus lines already report an inroad into bus express traffic. Application is pending before this Commission for extension of this operation to Georgia intrastate traffic and the effect of that extension on bus express revenues is one of the complicating factors in that proceeding. While the two services are dissimilar in many respects - bus express being basically an expedited service with no pick-up or delivery, and parcel service being overnight with pick-up and delivery - the lower charges of the parcel service, coupled with its pick-up and delivery provision, bids fair to offer real competition to bus express. How ever, with the withdrawal of the railroads from small shipments handling and the spiraling increase in charges of the truck lines for handling such traffic, there is a growing need for operations designed to handle small shipments.
One area of bus charges was revised during the year, that being charter coach rates. The live mileage charges were increased by 5 cents a mile for substantially all the State's major bus lines and other corresponding revisions were made in charges affecting charter coach movements.
While there were many bus schedule changes made during the year, few had any significant adverse effect on the traveling public intra state in Georgia and without exception all such adjustments were modified after informal handling to substantially satisfy complainants.
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TRUCK RATES
As was the case with bus fares, there were no general revisions of intrastate truck rates during 1966 - this being the sixth year since the Commission found it necessary to increase the rates of the fixed route motor carriers to offset rising costs of operations.
The only significant adjustment in the rates of the fixed route motor carriers of property during the year was the increase in a number of ratings applicable on certain textile products. Last year the National Motor Freight Traffic Association sought authority to increase these ratings to correspond with increases made effective on interstate traffic but the Commission, in consideration of protests from Georgia shippers against such ratings, declined to approve the increases pro posed. The matter was assigned for hearing several times, eventually being indefinitely postponed. When within seven months following such indefinite postponement no request was received from the applicant for further assignment of hearing, the Commission on February 18 dismissed the proceeding for want of prosecution. On February 25 the applicant requested reinstatement of the matter on the Commission's docket, which request was denied, but the Commission did accept a renewed application on March 31 and assigned that application for hearing and, after two postponements, the matter finally was heard on September l6. During the course of this procedural handling the applicant reduced the number of classification items in controversy but there still remained a number of increases protested. During the processing of these applications the parties attempted to reach a compromise permitting the publication of the increased ratings in the motor carriers' Uniform Freight Classi fication, while preserving existing ratings for application in Georgia through some other method of publication. The principal concern of the National Motor Freight Traffic Association was to eliminate any exceptions to its Uniform Classification tariff - it apparently not being too concerned with the level of rates applicable intrastate in Georgia. The protestants were concerned not so much with an increase in charges as direct result of the proposed increased ratings (since few textile products now actually move on these classification ratings in Georgia) but with the recognition of those increased ratings as being justified by basic classification principles reflecting the characteristics of Georgia intrastate movement of these materials. The protestants contended that all rates were basically related to the corresponding classification ratings and they feared that recog nition of the proposed increased ratings as reflecting bona fide classification principles in Georgia would eventually adversely affect the whole body of textile rates actually moving the traffic intrastate in Georgia.
After considerable negotiations between the applicant and the protestants and conferences of both with the staff of the Commission, agreement was reached whereby the protests would be withdrawn if the existing ratings were published in the Georgia Motor Trucking Associ ation Georgia Intrastate Tariff No. 1 -B, GPSC-MF No. 6 , as Georgia intrastate classification ratings, with the provision to be made that such ratings took precedence over corresponding ratings in the Uniform
- 68-

Classification. It was further agreed that such arrangement would be reflected in an order of this Commission, with such order to also indicate that the existing ratings to be so published reflected the classification characteristics of these commodities moving in Georgia intrastate commerce and that no change would be made in such ratings without prior specific approval of the Commission. Such order was issued and appropriate publication was made.
Several years ago the Commission authorized the motor carriers of liquid petroleum products, in bulk, to establish volume incentive rates on the movement of those products intrastate in Georgia and since that time has authorized changes in those plans to fit operating require ments. In each of the orders permitting establishment and modification of the plans, the Commission retained jurisdiction in order to investi gate the feasibility, from both carrier and shipper standpoints, of the volume incentive rate structure following practical experience with the several plans involved. In April the Commission called upon the motor carriers for records of all movements handled under the volume incentive rate plans for the month of March, 1966 - such records to show all the details of such movements necessary for proper billing, including origin, destination, weights, time, consignor and consignee. Following an extensive review of these records, the Commission con cluded that basically the volume incentive plan was advantageous to both the shippers and carriers of these products and with few exceptions, which were pointed out to the carriers with instruction for correction, the billing and handling of such shipments had been in proper compliance with the Commission's orders authorizing the incentive plans.
Later in the year further modification was sought in the motor carrier rates on petroleum products - such adjustment being an increase in the minimum weights. Inasmuch as the minimum weights originally established were the equivalent of full tank loads of the individual commodities at the time the rates were established, the Commission permitted the carriers to increase those minima to reflect the new loadings permissible under the revised State weight laws. It is hoped that the new minima will result in sufficient added revenue per vehicle to offset at least to some extent the constantly rising cost of oper ations and thus prevent a rate increase in the transportation of these commodities.
Most of the cotton transported by for-hire motor carriers within the State of Georgia is hauled by Class "B" carriers who generally per form a highly specialized service by stopping at several origins to assemble truckloads from the supply available at each origin. By tariff publication filed early in the year three of the principal Class "B" carriers of cotton proposed to increase their minimum weights from 15000 to 20,000 pounds on one rate scale and from 25,000 to 30,000 pounds on another rate scale, with the rates in both scales for distances beyond 75 miles to be increased by amounts varying from 3 cents to 5 cents per 100 pounds. In addition, it was proposed to limit stops in transit to two for loading and to eliminate all stops for partial unloading, with the provision that where there were two or more additional stops for pick-ups, charges would be computed on
69-

the basis of less-truckload rates. There was substantial opposition from the shippers to the proposal and, in consideration of that opposition, the Commission assigned the matter for public hearing. The record demonstrated that costs of operation had increased to the point where the increase in minimum weights and rates sought was justified and such adjustments were therefore approved as sought.
It was developed that the pick-up of cotton in small units from the various cotton warehouses to accumulate into truckload shipments has often been directed by the shippers in a manner re sulting in totally unreasonable times in transit and grossly in adequate revenues for the services performed - the existing stoppingin-transit rules apparently having been violated far more often than they have been observed. In spite of this, however, the Commission did not find justification for the harsh provision that would require the entire shipment to be billed at less-truckload rates if more than two additional stops were made and required modification of the rule to require such shipments to be charged for on a basis of the truckload rates up to and including the second extra stop, and the lesstruckload rates for subsequent stops or for the billing of such ship ments as two or more separate truckload movements, whichever resulted in the lower charges. The Commission felt that such revised rule, properly enforced, would give the carrier adequate protection against excessive stopping in transit and still give the shippers the ad vantage of truckload rates where the conditions so justified.
By application dated May 2b, and amended on May 31 > the Georgia Household Goods Movers Association, Inc., on behalf of the principal truck haulers of household goods in the State, requested that the Com mission grant financial relief to the Georgia household goods moving industry by granting, as an emergency increase in rates and charges, one hour's travel time on all hourly rated moves having origin and destination in the Atlanta metropolitan area (and, for account of one carrier, such shipments having origin and destination in several other areas) and to apply a corresponding charge of 30 cents per 100 pounds on shipments moving on weight and distance basis having origin or destination in the same territory and to increase charges for storage-in-transit and for warehouse handling from 50 cents to 60 cents per 100 pounds. The Commission for many years has resisted the imposition on this type of movement of charge for travel time primarily because of the possible abuse of such provision when actual travel time to and from each job was charged - but it was recognized that all of the surrounding States which regulate such operations permitted such travel time on a fixed allowance basis and that the traffic conditions of the highly congested Atlanta metropolitan area had steadily worsened to the extent that the carriers operating within, or to and from that area, required relief in the form sought. Accordingly, after full public hearing the Commission found that the involved segment of the household goods carriers operation was not bearing its fair share of the overall cost of such operations and the Commission approved the proposed emergency charges insofar as those charges applied to the Atlanta metropolitan area, subject to the understanding that similar charges be effected on moves totally within the city limits in that area so that there would be no
-70-

discrimination against movements under the jurisdiction of the Com mission. The Commission did not find it reasonable or practical, however, to approve such a surcharge for account of only one carrier in two widely separated areas where there was no persuasive evidence that such cost conditions existed and where the numerous other carri ers in that area did not see fit to so request. The Commission has repeatedly declined to complicate the rate structure of these specialized haulers by individual carrier exceptions and individual carrier rates and here announced that it would not do so except under compelling conditions not apparent in this proceeding. There also arose in connection with this proceeding the question of adjust ment in tariff rules and provisions to increase to a more reasonable level carrier liability for loss and damage. The applicants indicated that they would file with the Commission in time for a decision in 1966 proposed modification of all tariff rules, regulations and charges to more realistically reflect current conditions and that in such pro posal would be an adjustment in carrier liability. Under the circum stances, and in order to insure that such filing was not delayed, the Commission made its approval of travel time charges subject to expir ation date of December 31j 1966.
Later in the year the household goods carriers found that they would not be able to submit their tariff revision proposal to the Commission in time for review and publication in 1966, The carriers had hoped to make their intrastate tariff substantially uniform with their proposed new interstate tariffs which were being revised as result of investigation of the Interstate Commerce Commission into the rates, charges and practices of these carriers. The interstate investigation had taken longer than had been anticipated and the household goods carriers sought extension of the expiration date of their originally approved emergency increases in rates and charges to June 30, 1967, offering in exchange for such extension increase in liability to correspond to that becoming effective on interstate traffic on January 1, 1967 and indicating that the tariff proposal would be definitely filed prior to June 30. In consideration of the increase in liability to 60 cents per pound per article on weightdistance moves and to actual liability not exceeding $10,000 per vehicle on hourly moves, the Commission approved the extension in expiration date as sought.
As has come to be the practice almost yearly the motor carrier haulers of cement in bulk sought late last year an increase in rates on cement with the different carriers proposing different measures of increase. Protest was received against the increase proposal and the Commission assigned the matter for public hearing. Prior to the hearing and after conferences with affected shippers the applicants modified their increase proposal to a level acceptable to the industry and the Commission permitted the withdrawal of the protested rates and accepted the modified rates for filing as being satisfactory to both carriers and shippers.
The appendix to the Motor Carrier Rule 8 contains somehwat elaborate descriptions of the commodities generally included in Class "B" Certificates and in most instances certificates issued to such class of carriers for authority to handle individual commodities are
-71-

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now being issued in conformity with those descriptions. In the past, however, a number of such certificates were issued authorizing trans portation of the same commodity or commodities with descriptions varying from the official description in Motor Carrier Rule 8 and from each other. Inquiry arose during the year as to the scope of authority contained in such individual descriptions and after study and review the Commission held that where a commodity described in Rule 8 was listed in a certificate by generic name, its full description should be considered the same as that in Rule 8, even though said certificate did not specifically so indicate.
During the year there were numerous other minor adjustments in rates, charges and tariff provisions and much of the time of the staff of the Transportation Rates Division was occupied not in only reviewing these changes but in assisting the smaller carriers in the actual preparation of their tariffs. This is a service not generally rendered by regulatory commissions but this Commission has historically undertaken to provide as much assistance as possible to individual carrier efforts to comply with its technical rules and regulations and feels that the benefit to all is worth the time ex pended by its staff in that respect.
RAILWAY EXPRESS
For the first time in many years 1966 saw no general increase in rates of the Railway Express Agency. That agency is now on its own, committed to operate under its own management with substantial freedom from control by its railroad owners, and has adopted a policy of more aggressive rate computation which, coupled with proposed improvements in services, are designed to return the Express Agency to its previous position of importance in the transportation field. There was during the year a number of adjustments on individual rates and individual services, generally all reflecting corresponding charges on interstate traffic and all found to be reasonable for application within Georgia.
There were only two express agencies closed during the year in Georgia. The first - that at Townsend - was removed primarily because of adjustment in the schedule of the Seaboard Air Line Rail road passenger trains operating through Townsend, with the finding being made that the volume of traffic moving via express to and from that point did not justify the institution of substitute truck service. In the other instance the Express Agency was granted authority to close its office at Gray, following approval by the Commission of application of the Central of Georgia Railway to discontinue its agency service at that point.
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RAIL PASSENGER SERVICE
As has been the practice for the past several years, the Atlantic Coast Line Railroad again this year sought authority to consolidate its East and West Coast Champion passenger trains for the off-peak seasons of April 23 through June 15 and September 5 through December lU. The Commission, in accordance with its policy of permitting adjustments in service where demanded by economics of operation and where such adjustments would promote long-term retention of the service, again approved the seasonal consolidations, subject to the same provision that arrangements be made to provide substitute service between Nahunta and Waycross for passengers traveling between those points.
In January, the Seaboard Air Line Railroad Company sought authority to discontinue as flag stops for its Passenger Trains 9 and 10 (The Palmland) the Georgia stations of Clyo, Stillwell, Rincon, Richmond Hill, Riceboro, Jones, Townsend, Cox, Waverly, White Oak and Woodbine, The applicant contended that a change made effective on July 1, 1965 in the mail distribution system of the Post Office Department had removed the requirement that these trains stop at these stations for the handling of mail, that the passenger use of the trains was "extremely light", that the discontinuance of these flag stops would improve the schedule performance of Trains 9 and 10 and that substitute highway service would be provided at the involved agency stations by the Railway Express Agency for demonstrated express needs. On February 1 the Commission approved the application, subject to complaint and further order, and subject to the posting of appropriate notice at the affected stations, with the Commission itself specifically notifying the Mayor and Postmaster at each of the towns. There was received a number of objections to the proposed discontinuance of service, and in consideration thereof the Commission withdrew its conditional approval and assigned the matter for public hearing, with the provision that the parties could present their views by affidavit if such were desired. Following the presentation of the protestants at the hearing, the railroad amended its application to eliminate therefrom the stations of Clyo and Woodbine and indicated in addition that it would continue to stop these trains at the stations here involved for any organized group school movement or other group movements of similar type. The Commission has always been sympathetic with reductions in carrier cost possible through elimination of services no longer used or needed, particularly as was the case here where such services were rendered primarily for the handling of mail and the Post Office Department had discontinued the use of the trains for that purpose. The amendment to the appli cation to eliminate therefrom the stations of Clyo and Woodbine re moved much of the opposition, there remaining only indication of protest from Richmond Hill, Stillwell and Rincon, with only Richmond Hill having availed itself of the opportunity to express formal objection. The Commission found that the protestsfrom Stillwell and Rincon were primarily based on the need of the trains for handling mail and parcel post and that the evidence was conclusive
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that the Post Office Department and not the applicant had decided to discontinue the use of these trains for those purposes. The Commission further found, however, that the town of Richmond Hill had a valid complaint, particularly in view of the announced fact that a new major industry was locating near that point. Accordingly, the application, as amended, was approved with the exception of Richmond Hill.
By application dated March k the Southern Railway Company sought authority to discontinue operation of its Passenger Trains Numbers 3^ and 35 between Atlanta and Toccoa, Georgia (later amended at the hear ing to extend to the Georgia-South Carolina State Line). These two trains operated between the terminal, points of Washington, D. C. and Atlanta, Georgia with the schedule of southbound train 35 so arranged that there was a 9 hour and 35 minute layover in Salisbury, North Carolina. The trains operated a total of 637 miles in each direction, only 97 miles of which were in Georgia between the Georgia-South Carolina State Line and Atlanta. Prior to the hearing the Southern Railway had already obtained authority from the South Carolina Public Service Commission to discontinue the portions of the two trains operated in that State effective May 1, and had filed with the North Carolina Utilities Commission application to discontinue the North Carolina segment of the trains. The applicant submitted the usual exhibits showing the routes of the trains, the revenue therefrom and the cost of operations thereof - those statistics showing that for the year 1965 trains 3^ and 35 operated in Georgia a total of 70,810 miles and earned gross revenues of $129,600, of which $36,100 con sisted of passenger revenues, $57,200 mail revenues and $6,300 express revenues. The out-of-pocket expenses during the same period amounted to $1995100 resulting in a claimed net out-of-pocket loss of $69,500. It was shown that much of the revenues earned by these trains in 1965 would no longer be available to it - the Southern Railway having withdrawn its participation in the National Railway Express contract in September, 1965, and having handled no express on any of its trains since that date. In addition, the Post Office Department had advised the applicant that due to change in its mail distribution system the RP0 cars on the trains would be phased out in the near future with the consequent loss of the mail revenues. The application was opposed by a number of residents and organizations in the affected area, all of which contended need for the service with the representatives from Toccoa urging that if the application were approved Toccoa should be made a stop for the applicants "Southerner" trains. The Commission found that it was readily apparent that the Southern Railway had made little or no effort to attract passengers to trains 3^ and 35, that while the equipment was adequate, the break in schedule at Salisbury of over 9 hours effectively discouraged any long-haul traffic, that the use of two locomotives on these trains with their present-day consist was totally unrealistic and an un necessary expense for the trains, and that all these factors, to gether with the withdrawal from the Express contract, demonstrated that the Southern Railway had no real desire to retain its passenger train services. The Commission concluded that if the question before it were only that of the discontinuance of operation of these trains in Georgia and if the fate of the entire Atlanta-Washington operation
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depended on the decision by this Commission the application would be denied - that the elimination of excess equipment and resultant excess cost, coupled with potential service improvements would statistically justify denial of the application on such a basis. However, the Com mission acknowledged that it was faced with the fact that effective May 1 the two trains would be discontinued in South Carolina re sulting in the immediate loss of most of the mail revenue and the loss of substantially all interstate passenger traffic. It was conceded that the remaining $5300 in intrastate passenger revenue would pay less than 10$ of the crew wages alone, thereby making the continued intrastate operation of the trains a financial impossibility. Under such circumstances the Commission reluctantly approved the application effective the same time service was discontinued in South Carolina.
BAIL FREIGHT
For several years the railroads have been progressively dis continuing the handling of interstate less-than-carload freight - some railroads having discontinued entirely this area of service. A few years ago the Georgia & Florida Railway sought authority from this Commission to stop handling small shipments and the Commission denied that application, holding that a railroad duty as a public carrier included the handling of all classes of shipments. By application late last year the Seaboard Air Line Railroad Company sought authority to discontinue intrastate less-than-carload freight service to and from its stations in Georgia (except that less-than-carload shipments in lots of 4,000 pounds, or more, would be handled when from one consignor to one consignee, subject to the provision that such shipments be loaded by the consignor and unloaded by the consignee and not require rail road freight house handling). The application contemplated the dis continuance of such service not only at stations on the Seaboard Air Line Railroad, but also at the stations of Gainesville and Jefferson on the Gainesville Midland Railroad, a wholly-owned subsidiary of the Seaboard Air Line Railroad. At the hearing on the application the railroad submitted statistics showing the volume of less-thancarload traffic (weighing less than 4,000 pounds per shipment) had declined to 291 in number in 1964 and to 119 in the first 11 months of 1965. In 1964, 26 of the applicant's 63 stations participated in the forwarding or origination of the less-than-carload shipments handled and 30 of its stations participated in the delivery or termi nation thereof. During the 11 months of 1965, 18 of the railroad's 63 stations participated in the origination of the less-than-carload shipments and 23 participated in the termination thereof. The rail road claimed that during 1965 it had earned $1,497 from handling intrastate less-than-carload traffic with direct out-of-pocket costs of performing the service of $2,107 - an indicated direct out-ofpocket loss of $6l0. Corresponding statistics for the first 11 months of 1965 were claimed to indicate a loss of $238. It was urged by the carrier there would be no inconvenience to the public by the curtailment of less-than-carload service proposed and that adequate motor carrier service was available to each of the points here involved. The applicant summarized its case by contending that
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the little use being made by the shipping public of its available intrastate less-than-carload service clearly demonstrated that the shipping public had practically abandoned such service to and from the involved stations, that this type of service was readily avail able by other modes of transportation and that accordingly its pro posed discontinuance of less-than-carload service in Georgia was consistent with both the public interest and the applicants obligation as a common carrier and would enable the applicant to reduce its operating expenses which it contended, in view of constantly rising costs, was necessary to the efficient management of the railroad* The Commission found that all of the stations would not have substitute service as claimed - h stations having no intra state motor common carrier general commodity service and 8 stations having only 1 such intrastate motor common carrier; that even assuming the applicants computation of its out-of-pocket cost of handling less-than-carload traffic as being a reasonably statistically accurate assignment of costs to such service, it was doubtful if much of such cost would be saved if the service were discontinued and that the Commission still considered it to be the duty of a common carrier to handle all traffic tendered to it within the scope of its operating authority with any revenue deficiency incurred in handling any segment of traffic to be made up by rate adjustments to the extent necessary and not by the denial of such service to the public. Accordingly, the Commission denied the application and upon appeal of the railroad to the courts that denial was upheld.
Early in the year the Commission received complaint from a segment of the paper industry in Georgia concerning the competitive handicap to the pulpwood and pulpwood-using industries in the State of Georgia caused by the railroad pulpwood rates applicable on intra state joint line traffic within the State of Alabama being considerably lower than those applicable for joint hauls of corresponding lengths in the State of Georgia, with that handicap having been recently com pounded by the institution of novel rate practices in connection with the recent location of several paper mills in Alabama - as for instance, the placing within the switching limits of Montgomery of a new paper mill located more than 10 miles outside of the former switching limits of that point and the absorption by connecting lines of switching charges on both inbound and outbound traffic to and from that mill. By notice dated February 10, 1966 the Commission advised all rail roads operating intrastate in Georgia that it considered there to be no justification from a cost standpoint for the rates and charges for the transportation of pulpwood in Georgia being any higher than those in effect in the State of Alabama and that the situation resulted in an unwarranted burden on our pulpwood and pulpwood-using industries and a handicap to the efforts of our State to attract more pulpwoodusing plants. That notice advised all of the railroads in Georgia that unless immediate action were taken to place the Georgia pulpwood rates and related charges on the same basis as those in Alabama, the Commission would issue a Rule Nisi to show cause why it should not direct the establishment of such rates and provisions. The railroads were given time to answer the notice and that time was extended in order to give full opportunity for their investigation and reply. In that reply the railroads denied any element of unjust discrimination,
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and while conceding that the Alabama intrastate rates were lower in some instances on some traffic, contended that the Georgia rates also varied in some instances from the standard observed interstate and wound up with a veiled threat that if the proceeding were instituted
13 the railroads would file th Section proceeding against both the
Alabama and Georgia intrastate rates. The Georgia paper mills, with but one exception, requested the Commission to take no action con cerning these rates, stating that they were satisfied with the existing Georgia intrastate rates and indicating a fear that any proposal to change those rates would upset long established relation ships and endanger existing rate structures throughout the area. The Commission is now considering what further action, if any, to take in this matter but at the close of the year no decision had been made.

RAIL AGENCY SERVICE
The railroads continue to seek authority to discontinue their agency services at the smaller towns - either due to declining revenue from such stations or to change in consist of traffic to and from such stations to such as does not necessarily demand the services of an agent. Such applications declined in number this year, probably due to the fact that the agencies at most of the smaller towns have already been discontinued and that the possibility of savings in this area has
k been greatly diminished. This year the Commission processed only
such applications and, as is its established custom, adhered to the policy of deciding those applications on the need for and use of the service rendered rather than solely on the statistical showing of revenue versus cost. The Commission found in all of the four appli cations processed during 1966 that the public convenience and necessity did not require the continuation of agency service at the affected stations and accordingly authorized the discontinuance of such service at Gray, Jasper, Odum and Stockton.

WESTERN & ATLANTIC RAILROAD

The annual report of the lessee of the Western & Atlantic Railroad for the calendar year 1966 shows for the net expenditures charged to the accounting classification "Additions and Betterments" by classes of railroad property, the following amounts:

Improved Track Material..............

Replacement and Additional Ballast...

Bridges, Trestles and Culverts.......
Yard Tracks and Sidings .............

Station and Office Buildings ........

Roadway Buildings ....... .
Shops and Enginehouses

.... .

Communication Systems ..........

Signals and Interlockers.... .

Grade Crossings......................

$ 18,58k.k-7 *
(2,206.78)*
2,676.86 *
11,351.08 *
11,513.29 *
(k7 .02)* 2,2Qb.92
(909.26)*
1*1,607.39 *
5,667.13

* - Includes adjustments to prior years* reports.

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The above net additions reported are after deduction for value of property replaced during the year and total $63,522.08. 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, 19^6, amount to $8,388,^13,
There were contained in this 1966 Additions and Betterments Report a number of adjustments to prior years* reports reflecting changes in charges to the Additions and Betterments Account at various locations. Some of those locations were at or near Tilford Yard in Atlanta and inasmuch as the status of Tilford Yard was under review by the State it was concluded that the Commission would with hold its approval of this Additions and Betterments Report until such time as it had been determined what effect, if any, these adjustments in charges of prior years would have on the status of Tilford Yard.
There has been reviewed in prior reports activities in con nection with the proposed relocation of the passenger terminal of the Western & Atlantic Railroad in Chattanooga, Tennessee. This relocation and the attendant track revisions have been identified as Plan "N" and in the past several years there have been a number of stages of that plan effectuated. In March of this year there was presented to the Commission a proposed Supplemental Agreement to Plan "N" providing for acquisition of the last portion of right-of-way necessary for the tracks to be relocated under this plan. Upon development by the Com mission* s transportation staff that the proposed Supplemental Agree ment conformed to the basic Plan nNn which had been previously approved by the Commission, and since the Supplemental Agreement properly contained the provision that the State of Georgia did not assume any expense or cost in connection with the acquisition of this right-of-way, the Commission approved the Supplemental Agree ment and authorized the Chairman to execute the said Supplemental Agreement on behalf of the Commission.
As pointed out in last year*s report the State Properties Control Commission was actively engaged in the preparation of a new lease for the Western & Atlantic Railroad -- the current lease expiring on December 27, 19&9 Since the Chairman of the Public Service Com mission is a member of the State Properties Control Commission, and since members of the Commission*s transportation staff are on the staff of the State Properties Control Commission, it would appear proper to here briefly review the results of their participation in the preparation of that lease and other related activities.
The State Properties Control Commission concluded to seek competitive bids on the new lease of the Western & Atlantic Railroad
instructed its staff to prepare a new form of lease to accompany the invitation for bids. Preparation of that new form of lease was undertaken in cooperation with the consulting engineering firm of Ford, Bacon & Davis of New York City, employed by the State Properties Control Commission for that purpose, and following numerous conferences with the consultants and with representatives of the Louisville & Nashville Railroad and Southern Railway (the only two parties evi dencing sn interest in leasing of the property) there was completed
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late in the year the new lease form. Basically, the new lease followed the provisions of the existing lease which has proved adequate in most respects over the past b'J years with significant changes being as follows:
(1) Reservation to the State of all air and mineral rights for the entire length of the railroad.
(2) Elimination from the property to be leased of all parcels of land not directly connected with or needed for rail road purposes.
(3) Provision for reversion of passenger depot properties if and when such cease to be used for passenger operations over the Western & Atlantic Railroad.
Provision for additional rent (based on cost) where ad ditional property is obtained for the railroad.
(5) Strengthened provisions for upkeep of the railroad, in cluding increase in additions and betterments require ments from $60,000 to $120,000 per year.
(6) Provision for inclusion in such additions and better ments of needed sidetrack facilities.
(7) Clarification of tax status with income taxes specifi cally to be paid to the State.
(8) General provision for use of the property to the extent appropriate for rapid transit purposes in Atlanta.
(9) Provision authorizing subletting modified to provide that one-half of any sublease rentals accrue to the State.
(10) Trackage rights provision modified to provide that one-half of any trackage rights rentals accrue to the State.
The invitation for bids were issued on November 9 with advertise ments being made in newspapers of general circulation in every county through which the railroad operates in both Georgia and Tennessee. At the bid opening on December 12, the Southern Railway bid $995,000 per year, while the Louisville & Nashville Railroad bid $900,000 per year, with an alternative rental provision based on revenue, expense and investment factors which were stated to permit the State to share in any increase in earnings of the property. The State Properties Control Commission on December 20, 1966, after being advised by the consulting engineers that the alternative bid of the Louisville & Nashville Railroad was indefinite and could result in less, rather than greater, reton than the bid of the Southern Railway, concluded to find the Southern Railway to be the highest bidder and by majority vote resolved to forward the bid of that company to the General Assembly at its 1967 session for its confirmation or rejection as provided by the State Properties Control Code.
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PARTICIPATION IN INTERSTATE TRANSPORTATION CASES
In February the Commission was approached by representatives of the Atchison, Topeka and Santa Fe Railway (Santa Fe) seeking its support in applications pending before the Interstate Commerce Com mission for authority to acquire control of the Chicago, Rock Island and Pacific Railroad (Rock Island), Arrayed in one group seeking such control are the Union Pacific Railroad and Southern Pacific Lines and in the other group the Chicago and North Western Railway and the Atchison, Topeka and Santa Fe Railway. A preliminary survey indicated that these control proceedings were of importance to Georgia and the Southeast in view of the substantial and growing amount of traffic moving between the Southern States and those west of the Mississippi River. The major gateways in the South for such traffic are those at New Orleans and Memphis and the only transcontinental connections at those points are the Southern Pacific lines and its subsidiary. The Santa Fe's proposal includes that railroad obtaining the line of the Rock Island between Memphis, Tennessee and Tucumcari, New Mexico tying that line into its own line at Amarillo, Texas and upgrading the line to offer a competitive transcontinental route between the South and the West through Memphis. Of further benefit is the pool of more than 60,000 freight cars owned by the Santa Fe, access of which through a direct connection at Memphis could not help but contribute to the alleviation of the chronic freight car shortage in the South. After review of the situation, coupled with study of the presentation of the Santa Fe Railway, as well as study of testimony to be offered by the Southern Pacific at the hearings before the Inter state Commerce Commission indicating that the Southern Pacific did not plan to rehabilitate the Rock Island line to Memphis, it was the con clusion of the Commission that Georgia would be better off with the control of the Rock Island in the Santa Fe group. That conclusion had also been reached by the Atlanta Freight Bureau, Atlanta Chamber of Commerce and other shipper and civic groups and individual shipper interests in the South. The Commission intervened in the proceeding in support of the Santa Fe and plans to join the Southeastern Associ ation of Railroad and Utilities Commissioners in presenting testimony at the hearings.
In May. the Atlanta and West Point Rail Road Company and the Western Railway of Alabama filed notice under Section 15(a) of the Interstate Commerce Act of their intention to discontinue operations of their Passenger Trains Numbers 33 and 3^ between Atlanta, Georgia and Montgomery, Alabama. Upon receipt of copy of the notice as re quired by law, the Commission advised the Interstate Commerce Com mission that it was opposed to the proposed discontinuance of service and that it requested public hearing be held on the matter at a point in the State of Georgia on the route of the trains. In its statement of opposition, the Commission emphasized that it had a long history of concern with the operations of the railroads in the passenger field and had been in the forefront of nationwide efforts to lighten the burdens of the railroads in this respect; that it had permitted the discontinuance of a number of trains operating between points within the State of Georgia, both prior to and subsequent to the passage of the Transportation Act of 1958, and that while all such applications

had not been approved, the Commission felt that it was well acquainted with the passenger problems of the Georgia railroads. The Commission pointed out that the specific trains here involved served some of the most important industrial cities in western Georgia and the dis continuance of the trains would reduce passenger train service at Newnan, LaGrange and West Point to only one train in each direction daily and entirely eliminate railroad passenger train service to Grantville and Hogansville. Representative of the Commission appeared at the hearings before the Interstate Commerce Commission in Montgomery, Alabama and Atlanta, Georgia and cross-examined applicant witnesses on operational and financial statistics. Un fortunately, although indication had been made to the Commission otherwise, no member of the public appeared in opposition to this proposed discontinuance of service. The case was consolidated with train-off applications involving the remainder of the route of these trains between Montgomery, Alabama and New Orleans, Louisiana, and by order dated October lb the Interstate Commerce Commission permitted the discontinuance of the entire Atlanta-New Orleans, Louisiana operation.
In August the Commission received copy of petition of the Southern Railway Company to the Interstate Commerce Commission for authority to discontinue operation of its Passenger Trains Numbers 11 and 12 between Atlanta, Georgia and Birmingham, Alabama. Upon investigation, it was developed that these trains earned only $3,200 in passenger revenues during 19&5 and handled only 87 Georgia intra state passengers during that year and that the Post Office Department had removed from the trains the storage mail cars which formerly provided most of the trains1 revenues. In view of that extremely limited use of the trains, the Commission concluded to not oppose this proposed discontinuance of service.
In July the Central of Georgia Railway Company and the South Western Rail Road Company filed application with the Interstate Commerce Commission for authority to discontinue operations over, and to abandon, the line of railroad between Cuthbert Junction and Fort Gaines, Georgia. This branch line between Cuthbert and Fort Gaines is approximately 20 miles in length and serves one small station other than Fort Gaines. The condition of the line has deteriorated over the years and due to that condition and to the light volume of traffic, service has been reduced to a tri-weekly basis and less. A group of citizens of the affected area protested to the Interstate Commerce Commission and in consideration of such protests the matter was assigned for formal public hearing - that hearing to be held in Albany next January. The Fort Gaines area is interested not only in retaining railroad service for existing users, but also for the promotion of locating industry in an industrial park being developed in the area. The citizens* group requested the assistance of the Commission in its presentation and that assistance will be provided, including help in the preparation of the protestants* presentation, as well as counsel at the hearings the Commission representative to undertake, in addition, the analysis of statistics and cross-examination of applicant witnesses on their presentations of results of operations of this line.
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In October the Southern Railway Company discontinued- operation of its Passenger Trains Numbers 31 and 32 between Augusta, Georgia and the Georgia-South Carolina State line, as well as a portion of the service of those trains in South Carolina* Investigatioil of the operation of these trains indicated that they performed no Georgia intrastate service - stopping only at Augusta in the State of Georgia - and the Commission accordingly held that it had np jurisdiction over the operation of the trains and that there had been no lack of compliance by the Southern Railway with the rules of this Commission in the discontinuance of this service.
In December the Commission received copy of notice filed by the Southern Railway under Section 13a(l) of the Interstate Commerce Act proposing to discontinue permanently the operation of its Passenger Trains Numbers 8-7 and 8-7 between Birmingham, Alabama and Brunswick, Georgia, effective January 9> 19^7 The Commission advised the Interstate Commerce Commission that it was well aware that passenger train service, such as this, involving interstate trains were placed under the jurisdiction of the Interstate Commerce Commission by the Transportation Act of 1958 and that the decision to hold hearings and to approve or deny such proposed discontinuance of service, had since rested exclusively with that Commission. There was emphasized this Commission^ presentation to Congress in opposition to the Transportation Act of 1958 in which the Commission had pointed out that hearings held outside the affected area would not afford real opportunity for protestants to be heard and that accordingly the Com mission requested that if public hearings were held on this proposed discontinuance of service, such public hearings be held along the route of the trains at some location or locations in the State of Georgia. No such hearings were held - the Interstate Commerce Com mission on December 28 advising that it had concluded not to enter upon an investigation of the proposed discontinuance.
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