Report of the Georgia public service commission. Ninty-ninth report, 1971

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OE C20 1972
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99th Report Of li
Georgia Public
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Service Commission
J a n u a r y 1, 1971
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BOUND B Y TH E N A T IO N A L LIB R A R Y BIN D ER Y CO . OF G A.

M 1.

C O M M IS S IO N ER S
BEN T. W IGGINS.CHAIRM AN WILLIAM H. KIMBROUGH, V IC E c h a ir m a n
JBRT C.IB O B B YI PAFFORD WFORD L PILCH ER B. SPINKS

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2 44 W ASH IN GTO N S T R E E T , S.W .
At l a n t a ,Ge o r g ia 3 0 3 3 4
December 1, 1972

A. O. RA N DALL, s e c r e t a r y

To His Excellency Jimmy Carter Governor of Georgia
Dear Governor Carter:
As provided by law, the Georgia Public Service Commission submits herewith the 99th Annual Report of the regulatory activities of the Commission for the year ending December 31? 1971
Respectfully submitted,
Ben T. Wiggins, Chairman
llH ilIll

BOUND B Y TH E N A T IO N A L LIB R A R Y BIN D ER Y CO . OF GA.

Commissioner

C O M M IS S IO N E R S

BEN T. W IGGINS,ch a ir m an WILLIAM H. KIMBROUGH,VICE ch a irm a n

Ir OBERT C .IB O B B Y I PAFFORD CRAWFORD L PILCH ER FORD B. SPIN KS

(Ittrrgia public Herbie? (Jmmttisstmt

2 4 4 W ASH IN GTO N S T R E E T , S.W .
Atla n ta ,G e o r g ia 3 0 3 3 4

December 1, 1972

A. O. RANDALL, SECRETARY

To His Excellency Jimmy Carter Governor of Georgia
Dear Governor Carter :
As provided by law, the Georgia Public Service Commission submits herewith the 99th Annual Report of the regulatory activities of the Commission for the
year ending December 315 1971

Ben T. Wiggins, Chairman

>6rd W, Spi .s, Commissioner

S T A T E OF G E O R G I A JIMMY CARTER, GOVERNOR
99th Report of
GEORGIA PUBLIC SERVICE COMMISSION 2kk Washington St. S. W. Atlanta, Georgia 3033^+
January 1, 1971 to January 1, 1972
Ben t. Wiggins, Chairman William H. Kimbrough, Vice Chairman Robert C. (Bobby) Pafford, Commissioner Crawford L. Pilcher, Commissioner Ford B. Spinks, Commissioner A. 0. Randall, Secretary
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LIST OF CHAIRMEN OF THE COMMISSION

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James M. Smith Campbell Wallace James M. Smith Campbell Wallace L. N. Trammell T. C. Crenshaw Spencer Atkinson J. P. Brown H. W. Hill S. G. McLendon H. W. Hill C. M. Candler Paul Trammell James A. Perry Jud P. Wilhoit W . R . McDonald Matt L. McWhorter Crawford L. Pilcher William H. Kimbrough Ben T. Wiggins

1879 to
1882 to 188U
l8Qk to
1885 to 1890 1890 to 1900 1900 to 1901 1901 to 1903 1903 to 1905 1905 to 1907 1907 to 1909 1909 to 1911 1911 to 1922 1922 to 1926 1926 to 1933 1933 to 1937
1937 to igfS
19^9 to i960 i960 to 1969 1969 to 1971 1971 to --

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99th ANNUAL REPORT
Introduction
The Annual Report of the Georgia Public Service Commission covering the activities for the year ending December 31? 1971? is submitted herewith in compliance with the law.
On January 1, 1971? the Personnel of the Commission were as followsi
Ben T . Wiggins , Chairman Walter R. McDonald, Vice Chairman William H. Kimbrough Robert C. (Bobby) Pafford Crawford L . Pilcher
On February 25, 1971, Vice Chairman Walter R. McDonald passed away, leaving this position on the Commission temporarily vacant. On March 15? 1971 Governor Carter appointed Honorable Ford B. Spinks to succeed Mr. McDonald to serve until the next General election and until his successor is elected and qualified. Whereupon the Commission on said date met in Executive Session with all members present including Commissioner Spinks, and unanimously elected Commissioner William H. Kimbrough Vice Chairman for the remainder of the term for which Commissioner McDonald was elected.
The Personnel of the Commission as of December 31? 1971? are as follows:
Ben T. Wiggins, Chairman William H. Kimbrough', Vice Chairman Robert C. (Bobby) Pafford, Commissioner Crawford L. Pilcher, Commissioner Ford B. Spinks, Commissioner
A list of the Commission Staff personnel is as follows: A. 0. Randall, Executive Secretary and Legal Aide John R. Price, Reporter & Mrs. Marjorie Winnings, Reporter Robert F. Coheleach, Administrative Aide Utility Engineering Section Robert B. Alford, Chief Utilities Engineer Douglas N. Smith, Senior Utilites Engineer Truman E. Holland, Utilities Engineer James J. Crudup, Utilities Engineer

AUDITING SECTION Frank G. Heald, Public Utilities Auditor Nolan E. Ragsdale, Utilities Auditor John W. Buckingham, Utilities Auditor Thomas G. Arnold, Fiscal & Personnel Officer Mrs. Jean B. Trisch, Accounting Clerk Mrs. Jackie B. Mercer, Accounting Clerk
TRANSPORTATION SECTION David 0. Benson, Transportation Rates Expert J. Fred Parker, Transportation Rate Specialist III L. Thomas Doyal, Transportation Rate Specialist III
and Chief Law Enforcement Officer Albert R. Bush, Transportation Rate Specialist I Georgia E. Thurmond, Civil Defense Officer Larry L. Carpenter, Registration Supervisor
All other employees as of Dec. 31? 1971 are listed in alphabetical order as follows: Mrs. Gayle Arnold, Stenographer III Mrs. Carolyn Baxley, Stenographer III Miss Carol Bruce, Clerk II William T. Carden, Law Enforcement Officer Mrs. Judy Love Coheleach, Clerk II William S. Craton, Law Enforcement Officer Mrs. Shirley G. Demarest, Stenographer IV Mrs. Ann R. Donehoo, Stenographer IV W. E. Doolittle, Law Enforcement Officer
(Retired December 31? 1971) Bobby Edmonson, Clerk II Mrs. Joyce Franks, Clerk II Mrs. Martha Diane Green, Stenographer IV Miss Janice A. Hardy, Stenographer II Mrs. Mary F. Heaton, Clerk III Mrs. Carrie B. Hughes, Stenographer III Mrs Linda H. Ingle, Stenographer III Miss Carolyn B. Jenkins, Typist II Mrs. Gladys Lenox, Stenographer IV Mrs. Mildred Mangum, Stenographer III Mrs. Virginia Mann, Stenographer IV Judson L. McGinnis, Law Enforcement Officer David R. Meeks, Supervisor-Law Enforcement Officer Mrs. Allowee E . Meyers, Stenographer III Mrs. Virginia P. Norvell, Stenographer III Mrs. Rubye D. Otwell, Clerk III Miss Sandra R. Pace, Clerk II Mrs. Sally G. Perkins, Stenographer II Ernest A. Sims, Law Enforcement Officer Charles W. Walker, Law Enforcement Officer S. A. Wheeler, Law Enforcement Officer
5 - -

.

Floyd L. White, Law Enforcement Officer Chester A. Whitley, Law Enforcement Officer
Employees who retired during the year were as follows:
Herbert R. Dougherty, Law Enforcement Officer W. E. Doolittle, Law Enforcement Officer Mrs. Mae A. Montgomery, Hearing Reporter - Mention should be made of the long and faithful service of Mrs. Montgomery as Official Reporter for eighteen years. The Commission evidenced its appreciation and esteem with a beautiful party and gift in the Commission's Hearing Room where her reporting of the many cases heard by the Commission was perf ormed.
Mention should also be made of the untimely death of Mrs. Patsy B. Porter, Secretary to Vice Chairman William H. Kimbrough, and a valued employee, from an incurable illness.
PUBLIC HEARINGS
During the year the Commission conducted three hundredseventy (370) public hearings. Public hearings commence on the second and fourth Tuesdays in each month and continue on successive days thereafter until all current 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.

MOTOR CARRIER CERTIFICATE AND LICENSE FEES

The Commission is charged with the responsibility of collecting and accounting for motor carrier certificate and license fees. The total certificate, permit and license fees collected and remitted to the State Treasurer during the year 1971 are as follows ;

January 1, 1971 to January 1, 1972
Certificate Fees at $35.00~each, and cert-
ificate transfer fees at $7*50 each.......... .........$ U,0^0.00

Registration Permit Fees at $25.00 each and
amendment fees at $5.00 each.... ..................... 3 7,185*00

Regular License fees at $25.00 each................... 331,000.00

Regular Identification stamp fees at $25*00 each; Regular identification stamp fees at $1.00 each; Replacement stamp fees at $1.00 each; and Multiple Registration Stamp fees
at $1.00 each
TOTAL

--- 352,061.00
$72^,286.00

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In addition to the foregoing certificate and license fees of
$8783225.50 collected by the Commission, the Railroads and
Utilities under the jurisdiction of the Commission were subject
to a tax assessment which produced a sum of $280,000.00, which
was collected by the Property and License Tax Unit of the Depart ment of Revenue, making a total of $1,00^,286.00 available for appropriation to the Commission.
COMMISSION DECISIONS During the year 1971 the following Executive Ses;,u.on decisions were made by the Commission:
Motor Carrier Decisions: Certificate Applications :

Dismissed-- ------ --- ------------------------ 9 Total---------126

Certificate transfer applications:

Approved--- -------

53

Denied------ ----------- -------------------- --- 5

Withdrawn------

2

Total-------To

Certificate amendment applications :

^

Denied------ ------------------------------ -----10 Dismissed-- ------------- ---------------------- 1
Certificate control through transfer

Certificates Cancelled

----------- -- *-- -- 2^

Certificates suspended---------------

112

Certificates reinstated-- ------- ------- --- --- 91

Total---- ----- 227

Rules Nisi issued other than insurance-- --- 28
Rules Nisi dismissed-------------- --- --- ----- 20 Total-- ------- T

Insurance and Permit rules nisi issued--undetermined

Miscellaneous: (Extensions, reconsiderations,
refunds, e t c . ) ----- ----- *---- 269

Transportation Rates & Service Department:

Railroads & Motor Carriers:

Docket Decisions--- --------

29

Non-Docket Decisions---------------

-570

Total-------- - - 5 9 9

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Utility Rates & Service Department:
Docket Decisions--- ------------ ------- -------- 7o
Non-Docket Decisions---- *----- --------- --------86 Total-- ----- 162
TOTAL ALL DECISIONS

AREA TRANSPORTATION SUPERVISION
Area Transportation Supervision, a part of the Commission's Transportation Division under direction of David 0. Benson, is headed by L. T, Doyal, Assistant to Director, with duties as Chief of Area Transportation Supervisors. In addition, this section consists of a supervisor of the area supervisors an nine field personnel. These area supervisors are assigned specific territories in the State ranging from three counties (Atlanta area) to as many as thirty-six counties in the southwest section of the State. The Commission's Area Transpor tation Supervisors make detailed inspections of the general operations of motor transportation companies under the Commission's jurisdiction to determine if ey are performing transportation service within the scope of the operating authori y granted by the Commission and in accordance with the Commission's rules and regulations and the laws of Georgia relating to "for hire" motor carrier opera tions. This includes conducting safety checks of carrier's motor vehicles to ensure safe operations over the highways; performing periodic road checks for^ o safety and economic performance by motor carriers; examination of the carrier s files, books, etc.; interrogation of carrier's personnel and offering advice to carriers when needed or requested. In addition, the area supervisor performs other specifically designated assignments related to the duties of the Public Service Commission.
The Commission, who helped pioneer the development of the Uniform Regis tration Standards of Public law 89-170 applicable to carriers operating solely in interstate commerce under authority granted by the Interstate Commerce Commission, or carriers operating in interstate commerce specifically exempt from the jurisdiction of the Interstate Commerce Commission, continues in its third year of operation subject to the above standards. These standards were promulgated by the Interstate Commerce Commission pursuant to the provisions
of Section 202(b)(2) of the Interstate Commerce Act (U9 U.S.C. Section 302(b)(2j;
and all of the states were allowed five years from the enactment thereof to adopt the provisions of Public Law 89-170. Georgia was one of the first states to adopt these standards and has actively engaged in assisting other states in effectuating these procedures.
During 1971, several concentrated road checks were conducted throughout the state, in addition to many other lessor checks made in strategic locations. The major road checks ranged from three to five days duration, while the lessor checks lasted from several hours to one or two days. All of the area supervisors operate continuously in their assigned territories, seeking to ferret out and eliminate illegal transportation operations. The nature of the illegal operator precludes the establishment of permanent inspection points since Georgia s maze of highways enables the illegal operator to easily circumvent any established check point. Our Area Supervisors patrol the highways, investigates industrial sites and a,11 other locations where the illegal trucker is apt to be operating.
The Commission's Area Supervisors, while conducting their routine investi gations and while participating in road checks, also inspect vehicles for mechanical, defects and to ensure that vehicles are being operated in accordance with our safety rules and regulations. On the spot repairs are required on vehicles discovered with serious mechanical defects, and on less serious defects the carriers are advised of such and required to make repairs within specified time limitations.
The Area Transportation Supervision Section performed several joint investigations with the Interstate Commerce Commission and Department of
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Transportation under cooperative agreements between this Commission and these res pective agencies. Also, several of the Area Supervisors participated in safety road checks conducted by the Safety Council of the Georgia Motor Trucking Association, in an endeavor to encourage carriers to maintain their vehicles in safe operating condition for the benefit of the public utilizing the highways of Georgia.
In 1971j we instituted a new program designed to further protect the public using the highways and to apprise the carriers of the operating habits of their drivers. Our Area Supervisors were provided with an appropriate observation form and tape recorder to enable them to observe vehicles while in operation, recording their description, location, activities and operational violations. Each officer is responsible for a given number of these observation reports^ daily and copies are sent to the carriers for their information and appropna e corrective action where they deem it necessary.
The Area Transportation Supervision Section, in addition to the responsi bility of processing all motor carrier insurance filings as wel.1 as maintaining all motor carrier files, m s responsible for processing all interstate regis tration of authority applications and amendments thereto and the issuance of all intrastate and interstate Georgia Public Service Commission motor^ vehicle registrations which resulted in the collection of fees as summarized on Page 6 of this report.
Due to the illness of one of the Area Supervisors, lasting the better part
of 19713 the Commission operated with only seven Area Supervisors through
August 1. Effective August 1, this supervisor retired and his position was filled on August 16. On September 1, an additional Area Transportation Super
visor was added to the staff. These nine Area Supervisors performed 699
individual vehicle safety inspections, 100^ inspections for operating authority and proper vehicle registration, resulting in direct collection of $l6,h7700 in vehicle registration fees where vehicles had not been properly registered. Three hundred, fifty-seven arrests were made throughout the state stemming solely from intrastate and interstate "for hire" operations without proper authority either from this Commission or the Interstate Commerce Commission. These arrests resulted in bonds totaling $5^,856.00 being posted in the counties where arrests were made. The Commission Area Supervisors also performed 619 rate checks of intrastate "for hire" carriers to ensure that the certificated carrier is adhering to the rates and charges published in its tariff lawfully on file with the Commission and,in addition, performed 7^+3 other miscellaneous functions in the pursuit of the Commission's business, including personal contacts, special investigations, etcetera.
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TRANSPORTATION General

During 1971, 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), 580 transportation rate and service matters, a considerable number of which required lengthy studies and investigations in the field.

Docket N o . Date

713-R

1-28-71

FORMAL CASES FOR YEAR 1971

Subject

Disposition

Application of railroads to increase Hearing post

minimum loading requirements on

poned to a date

pulpwood.

to be later fixed

4234-M

2-4-71

Application of Smoky Mountain Stages for authority to discontinue certain service between Blue Ridge and Atlanta.

Application withdrawn

Non-Docket 2-4-71

Application of Metropolitan Transit Approved System, Inc. to increase charges for sightseeing service.

Non-Docket 2-4-71

4237-M

2-11-71

Petition of Seaboard Coast Line Railroad Company for authority to dualize agency services at Colbert and Comer.

Approved

Application of motor carriers trans porting petroleum products in bulk for authority to increase rates.

Proceeding delayed pending carrier-shipper conference

4238-M

2-11-71

Application of Greyhound Lines, Inc. Denied for authority to revise service between Lawrenceville and Atlanta.

Non-Docket 2-18-71

Application of Railway Express Agency, Inc. to close the express office at Marietta.

Denied

Non-Docket 2-18-71

Application of Railway Express Agency, Inc. to close the express office at Ideal.

Approved

11

FORMAL CASES FOR YEAR 1971 (Cont'd)

Docket N o . Date

Subject

Disposition

4238-M

2-18-71

Application of Greyhound Lines, Inc. for authority to revise service between Lawreneeville and Atlanta.

Petition for re hearing and re consideration denied

4204-M

3-1-71

Rule Nisi against Bulldog Trucking, Dismissed Inc. to show cause why its certifi cate should not be amended to specif ically list therein the commodities included in the term "building materials" in its certificate.

4243-M

3-1-71

Applications of Association of Georgia Class "B" Carriers, Inc. and M & M Tank Lines, Inc. for authority to increase rates on cement.

Approved

701-R

3-25-71

Petition on behalf of the Southern Paper Manufacturers Traffic Confer ence, Continental Can Company, Great Northern Paper Company and Union Camp Corporation seeking reconsider ation of the Commission's order of August 17, 1970.

Denied

Non-Docket 3-25-71

Application of Atlanta Transit System, Inc. to raise combined park ing & shuttle bus charges from 50c to 75<?, with a 20-day commuter pack age to be offered at $12.50 per book on its "Town Flyer" shuttle bus ser vice.

Approved

4281-M

4- 7-71

Application of bus lines to restrict Approved to 5 the number of packages in a single lot shipment and to limit the size of shipments so that the longest measurement would be 60 inches.

Non-Docket 4-7-71

Application of Railway Express Agency, Inc. to close the express office at Allentown.

Approved

Non-Docket 4-7-71

Application of Railway Express Agency, Inc. to close the express office at Dudley.

Approved

Non-Docket 4-7-71

Application of Railway Express Agency, Inc. to close the express office at Trenton.
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Approved

FORMAL CASES FOR YEAR 1971 (Cont'd)

Docket N o Date Non-Docket. 4-7-71

Subject
Application of Railway Express Agency, Xnc. to close the express office at Montrose.

Disposition Approved

Non-Docket 4-14-71

Application of Central of Georgia Railway to establish a mobile agency operation serving the towns of Bowdon Junction, Yates and Newnan.

Approved on permanent basis

Non-Docket 4-28-71

Application of the Georgia Railroad Approved on seeking authority to temporarily use temporary basis the agent at Harlem to serve both the agency at Thomson and Harlem on a
part-time basis.

715-R

5-4-71

Application of Seaboard Coast Line Railroad Company to establish a mobile agency operation serving the towns of Ailey, Glenwood, Alamo, Soperton, Ochwalkee and Tarrytown.

Approved for 6 months1 test

Non-Docket 5-6-71

Application of Georgia Railroad for Approved authority to consolidate its agencies at Milledgeville and Haddock.

718-R

5-10-71

Application of REA Express for au Approved thority to increase intrastate rates and charges to interstate level.

Non-Docket 5-24-71

Application of Georgia Railroad for authority to consolidate its agencies at Thomson and Harlem.

Approved

707-R

5-26-71

Application of Central of Georgia Railway, Savannah & Atlanta Railway and Southern Railway for authority to publish reduced rate on stone from Palmer to Port Wentworth, sub ject to annual volume of 100,000 tons.

Approval granted for rate re lated to that from Camak.

Non-Docket 5-26-71

Application of Southern Railway Com pany, Georgia Southern & Florida Railway and Central of Georgia Rail way Company to abandon and dismantle the Macon Terminal Passenger Station and to abandon and remove all ancil lary and secondary tracks serving said station.

Approved, subject to restoration if passenger ser vice reinstituted

FORMAL CASES FOR YEAR 1971 (Cont'd)

Docket N o . Date

Subject

Disposition

717-R 720-R 4237-M

6-17-71 6-17-71 6-17-71

Application of Southern Railway Company for permission and approval to institute condemnation proceedings for the purpose of acquiring certain property in Floyd County.

Approved

Application of Albany & Northern Railway Company to discontinue agency service at Warwick.

Approved

Application of motor carriers of petroleum products in bulk for authority to increase rates by 7 percent.

Lesser increases authorized, with some rates to be adjusted to re flect current highway mileages

4220-M

6-17-71

Petition of Association of Georgia Class "B" Carriers, Inc. and M & Ml Tank Lines, Inc. for authority to increase by 10 percent all rates on commodities in Appendix to Commis sions Motor Carrier Rule 8.

Approved, with exceptions as to rates on roofing and iron and steel articles

Non-Docket 6-17-71

Application of Railway Express Agency, Inc. to close the express office at Du Pont.

Approved

Non-Docket 6-17-71

Application of Railway Express Agency, Inc. to close the express office at Attapulgus.

Approved

Non-Docket 6-17-71

Application of Central of Georgia Railway Company for authority to dismantle, remove or otherwise dis pose of the depot building at Bowdon Junction.

Approved

4339-M

6-28-71

Applications of National Bus Traffic Approved to Association, Inc. for account of the interstate basis principal Georgia bus lines seeking increase in rates applicable on trans portation of newspapers and restric tion on transportation of passenger baggage.

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FORMAL CASES FOR YEAR 1971 (Cont'd)

Docket No . Date Non-Docket 7-13-71

Subject

Disposition

Application of Southern Railway Com- Approved^for

pany to establish a mobile agency

6 months test

operation serving the towns of Bremen,

Douglasville, Villa Rica, Tallapoosa,

Winston and Temple.

719-R

7-15-71

Application of Georgia Northern Rail- Denied way Company for authority to discon tinue agency service at Pavo.

721- R

7-15-71

Application of Southern Railway Com- Denied pany for authority to discontinue agency service at Zebulon.

722- R

7-15-71

Application of Southern Railway Company for authority to discontinue agency service at Chattahoochee, to discontinue handling less than car load freight at that point; to dis mantle the station building at Chattahoochee and to place Chatta hoochee on a prepay basis for han dling carload freight only.

Approved

Non-Docket 7-15-71

Application of Atlanta and West Point Railroad Company to temporarily close its Fairbum agency, with Fairburn industries to be served by its College Park agent.

Approved temporary closing

714-R

8-4-71

1st Supp. 4220-M

8-4-71

Application of railroads operating intrastate within the State of Georgia for authority to increase their freight rates and charges on Georgia intrastate traffic to the same extent as their interstate rates and charges were increased under authority of order of the Interstate Commerce Commission dated November 4, 1970 in Ex Parte 265.
Petition of Association of Georgia Class "B" Carriers, Inc. and M & M Tank Lines, Inc. seeking authority to increase by 10% all rates on commodities in Appendix to Commis sions Motor Carrier Rule 8.

Approved
Clarification of limitation of increase on iron and steel articles

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FORMAL CASES FOR YEAR 1971 (Cont'd)

Docket No. Date

723-R

8-4-71

Subject

Disposition

Application of R.E.A. Express, Inc. Denied to increase rates on milk and cream.

Non-Docket 8-4-71

Application of Central of Georgia Railway Company to dismantle, remove or otherwise dispose of the depot building at Yates.

Approved

Non-Docket 10-15-71 Application of the Georgia Railroad to consolidate its agencies at
Greensboro and Madison.

Approved

Non-Docket

10-15-71

Application of Southern Railway Com Approved for

pany to establish a mobile agency

6 months' test

operation serving the towns of

Lavonia, Royston, Bowman and Elberton

with base to be at Toccoa.

725-R

10-29-71

Application of Southern Railway to institute condemnation proceedings for acquiring certain property in Fulton County.

Approved

Non-Docket 11-10-71 Price Board guidelines governing intrastate rate adjustments.

All carriers required to post pone effective date of pending tariffs to November 13, 1971

4445-M

11-11-71 Application of Greyhound Lines-East for authority to adjust service between Atlanta and Rome.

Approved on trial basis

1st Supp. 714-R

11-18-71

Application of rail carriers to increase intrastate rates to the interstate level approved by Interstate Commerce Commission on November 4, 1970 in Ex Parte 265.

Approval of August 4, 1971 reaffirmed under Price Board regulations

724-R

11-18-71

Application of Seaboard Coast Line Railroad to dismiss application to discontinue agency service at Ludowici and proposing the dualization of its agencies at Ludowici and Walthourville.

Approved

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FORMAL CASES FOR YEAR 1971 (Cont'd)

Docket N o . Date

Subject

Disposition

4334-M

12-2-71

Application of Benton Transport Corporation for Class "B" certifi cate to operate in intrastate com merce and for corresponding authori ty to conduct operations in inter state and foreign commerce.

Application approved upon surrender of con flicting portion of Class "E" certificate

726-R

12-21-71 .

Application of the Seaboard Coast Line Railroad to establish a mobile agency operation serving the towns of Pembroke, Claxton, Bellville, Collins and Lyons and the non-agency stations of Reka, Groveland, Daisy, Hagan, Manassas and Ohoopee.

Approved for 6 months1 tes t

17

BUS FARES AND SERVICES
At the end of 1971, there were still 36 bus lines operating under the jurisdiction of the Commission providing passenger service between points in Georgia - an apparent end to the declining trend in number of such carriers which began at the end of World War IX* Con sequently, the area and route coverage of the State*s bus lines con tinues the same.
There were several rate adjustments during the year for accessorial services but none involving general increase in passenger fares. In February the Metropolitan Transit System, Inc. secured au thority to slightly increase its charges for sightseeing service an in March the Atlanta Transit System, Inc. secured authority to raise the fare on its "Town Flyer" shuttle bus service (which it operated under contract with the Metropolitan Atlanta Rapid Transit Authority and the City of Atlanta) from 50q to 75<? for combined parking fee and shuttle bus fare with a 20-day commuter package to be offered at $12.50 per book. This "Town Flyer" bus service had been operated on a trial basis in an effort to relieve downtown congestion and t-he in crease in fare was permitted to enable the operation to continue wit out the severe losses it had been experiencing with the understanding that any such losses must not be charged to the regular users of the transit system service. It should be here noted that following the creation of the Metropolitan Atlanta Rapid Transit Authority by the General Assembly, the Atlanta Transit System, Inc. and Metropolitan Transit System, Inc. were both absorbed by MARTA and these services are no longer to any extent under the jurisdiction of this Commission.
In April the principal bus lines sought authority to restrict to 5 packages the number of packages that may be included in a single lot shipment and for authority to limit the size of shipments accepted for transportation by bus so that the longest measurement would be 60 inches. Following public hearing at which no one appeared in opposi tion, the Commission in consideration of the fact that the proposed re striction had already been approved for application on interstate traffic, that the authority sought was of general application and that it would be of inconsequential effect upon the users of the service, approved the restriction. In June the same bus lines sought authority to increase rates for the transportation of newspapers in package ser vice and to limit to 3 pieces weighing not more than 150 pounds baggage allowance for adult passengers and to 2 pieces weighing not more than 75 pounds the baggage allowance for child passengers. Following public hearing on this application at which again there was no opposition, the Commission approved these adjustments to the interstate level already in effect.
There were many bus schedule changes made during the year but few had sufficient impact in Georgia to require formal action by the Commission. Among those requiring such action were applications to dis-
- 18

continue local service between Atlanta and Blue Ridge, between Atlanta and Lawrenceville and between Atlanta and Rome. The Atlanta-Blue Ridge proposed changes were withdrawn by the bus line following receipt o substantial opposition thereto and the Atlanta-Lawrenceville adjustments were denied by the Commission following public hearing for the reason that the service was required by the traveling public in the area. The Atlanta-Rome service proposal was modified to reflect agreement between the carrier and passengers involved and following a trial of che revise services, the new schedules were approved.
WAGE-PRICE BOARD REGULATIONS AND THEIR EFFECT ON COMMISSION ACTIVITIES
On August 15 the President of the United States issued a proclamation freezing wages and prices until there could be worked out regulations establishing permissible ranges for increases in wages an prices, including those affecting the transportation industry. As suit of that freeze, the Commission, during much of the remainder of the year, did not consider any increases in transportation rates and requirec postponement of then-pending tariff adjustments for an indefinite period until the Commission received from the Price Board guidelines to be applied in connection with proposed increased charges of regulated industries. In November preliminary guidelines were issued but up to
the end of the year no firm guidelines had been received and the 9
activities of the Commission in the transportation rate field should be viewed in the light of these restrictions on the normal regulatory functions of the Commission.
TRUCK RATES AND SERVICES
The continuing trend in Georgia and throughout the nation - at least during the portion of the year prior to the imposition of the Wage-Price freeze - of spiraling increases in cost of wages and materials forced a wide range of adjustments in the rates of the motor carriers of property.
Following public hearing and several postponements in effec tive date of proposed adjustments, the transporters of petroleum prod ucts in bulk in June reached agreement with protestant shippers of those products for increase in rates of 5% on distances up to 50 miles and 7/o on distances over 50 miles, with those increases to be so published as to maintain rates on No. 2 fuel oil at the level of 112% of the rates on gasoline and the rates on residual oil at the level of 120% of the rates on gasoline. Agreement \*as also reached as to changes in miscellaneous charges, rules and regulations affecting the movement of such commodities. The Commission, in consideration of the agreement between the shippers and the carriers, approved the increases as agreed upon with a further stipulation that appropriate modification be made in point-to-point rates where those rates no longer reflect current highway distances between the
19 -

points involved.
By application filed late last year, the principal motor car rier transporters of cement sought authority to increase their rates by approximately 7% and to make such rates more uniform with those appli cable on interstate traffic. At the hearing - at which no opposition was expressed - it was shown that the operating ratio of these carriers was still in the high 90*s and following review of exhibits showing details of increases in carrier operating costs, the increase sought was
approved.
By petition filed in November of last year, the Association of Georgia Class "B" Carriers, Inc., on behalf of its member carriers and other carriers participating in its general tariff, sought authori ty to increase by 10% all rates covering commodities listed in Appendix to the Commissions Motor Carrier Rule 8, By application received in February of this year, M & M Tank Lines, Inc. sought similar authority to increase its rates on the same commodities. Following hearing m March at which there was no opposition expressed to tne increases, the Commission approved the increases for all the applicants as proposed, with exception that it limited the increase on composition roofing and roofing materials to 4% and the increase on iron and steel articles to slightly less than 4%.
By application filed in May, Benton Transport Corporation sought a Class "B" certificate of public convenience and necessity to^ transport foodstuffs, canned, prepared or preserved, not frozen; cooking or edible oils, matches, oleomargarine, shortening, except commodities in bulk and frozen foodstuffs, from the plant site of Hunt-Wesson Foods, Inc., Savannah Distribution Center, Chatham County, Georgia and/or from the plant site of Hunt-Wesson Foods, Inc., Atlanta Distribution Center, Fulton County, Georgia, on the one hand and all points in Georgia on the other hand, over no fixed route. The applicant also sought correspond ing authority to conduct operations between the same points in inter state and foreign commerce under Section 206(a) (6) of the Interstate Commerce Act as amended. Under the provisions of both State and Federal law, the matter was assigned for hearing on both the intrastate and interstate applications and there was substantial opposition expressed by other motor carriers then holding either intrastate or interstate authority to perform some or all of the transportation involved. It was developed at the hearing that, while the movements for this shipper be tween these points was physically totally between points in the State of Georgia, much of the traffic involved originated at points on the West Coast, being shipped to distribution points in Georgia and later distributed to final Georgia destinations. A railroad tariff under which the movements from the West Coast take place provides for a substantial reduction in transportation charges where the goods are stored in tran sit and later reshipped with such later reshipment via motor common car rier at "...truckload rates of not less than 17.5 cents per 100 pounds which are lawfully on file with the Interstate Commerce Commission at tHe time of the subsequent movement." This tariff provision requires that the subsequent movement be considered interstate in character and that the carrier transporting the goods in such subsequent movement have
20

appropriate interstate authority. Some of the articles shipped by this company are manufactured in Georgia and most of its shipments consist of mixtures of articles manufactured in Georgia with those brought in from the West Coast. This fictional transit arrangement and its specific requirements forced the shipper to seek a carrier which had the requisite authority as well as the necessary equipment and facilities to provide the service it needed. Following long and exhausive hearings, the Com mission found that there was need for the proposed operation under the circumstances developed at the hearings, that there was not available to the shipper the services and facilities otherwise and, under the circum stances, the Commission approved the application on both intrastate and interstate traffic, subject to the provision that the applicant surrender for cancellation that portion of its existing contract carrier certifi cate which duplicated in some degree the new authority granted by the Commission.
By petition received in June, the Class nA M motor common car riers of property sought authority to increase their less truckload or any quantity rates by 7 percent, their volume or truckload rates by 3 percent and their minimum charge from the existing $5.10 per shipment to amounts ranging from $6.29 to $7.34 per shipment based on the distance such shipments moved. Initial hearing x?as held on the proposal in July at which time the hearing was not completed. A further hearing was then scheduled for September 8th. Before such further hearing could be held, the President of the United States inaugurated his wage-price freeze and, for the announced reason that they felt that they should cooperate as ^ fully as possible with the Presidents program to stabilize the nation s economy, the applicants requested cancellation of the September 8, 1971 hearing and continuation of the application "...until such time as it may be more appropriate to resume the hearing." As of the end of the year, no further hearing had been held and the matter is being held in abeyance pending further developments in the Economic Stabilization
Program.
By application dated May 11, the Georgia Household Goods Movers Association, Inc., on behalf of the household goods carriers par ty to its intrastate tariff, sought authority to increase both their mileage rates and their hourly rates and, in addition, to make a number of minor changes in rules and regulations and to broaden the area of application of hourly rates to 30 miles in lieu of the present 20 miles. The applicants submitted at the hearing statistics obtained from 15 representative carriers detailing such operational information as gross revenue, gross operating expenses, amounts paid to drivers, packers, helpers, warehousemen, etc., and amounts paid for fuel and oil and maintenance and repair. In addition, survey was made to show compari son of wages paid on March 1 and July 1 of this year for carrier labor and specific studies were made of details of handling of a representa tive number of both xight and distance shipments and hourly rated ship ments. Following complete analysis of both applicant exhibits and Com mission records, the Commission found that the expenses incurred by these carriers had increased substantially since the last adjustments in household goods rates were authorized - particularly in the area of wage costs. In recognition of the fact that wage costs are a major
- 21

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portion of household goods carrier expense, especially in the shorter moves under hourly rates, the Commission authorized the increase soug in hourly charges. The increases sought in the weight and distance rates and in accessorial charges were to the level of the correspon ing interstate, rates and charges hut the Commission found that approval o such proposal would have in many instances resulted in very substantia percentage increases in individual rates and charges ranging^up to over 100%. The applicants strongly contended that severe inequities existe in requiring observance intrastate in Georgia of lower rates an esser charges that apply on interstate traffic to and from Georgia for t e exact same measure of transportation services and, xghile it he t a possibly from a rate comparison standpoint the increases soug t cou have been approved in toto to meet the carrier's complaint as to sue inequities, the Commission did not find justified by the recor or reasonable under the circumstances such large percentage increases. Accordingly, the Commission authorized a substantially lesser amount o increase than sought in both the mileage rates and in many o t xe acces serial charges, holding that it had approved only those increases con sidered absolutely necessary to permit the continuation of house o goods transportation services in Georgia at an adequate leve an to re move some measure of the economic distress apparent in the operations of some of the affected carriers.
RAILWAY EXPRESS
The Railway Express Agency continues to experience severe financial problems in spite of its conversion to motor carrier opera tions, its many changes in management and its attempted reductions in cost of operations. The continuing increase in costs in spite of a such efforts forced the Express Agency during the year to seek further increases in its rates applied nationally and within Georgia and the other States and, during the year, the Commission approved increase in Georgia intrastate express rates to the level generally applied on interstate traffic. In a specific instance, however, and as a result of complaints from affected shippers, the Commission denied a proposed cancellation in long-standing commodity rates on milk and cream because of the severe impact on users of the service, with the recognition that the rates were low in light of the Express Agency's financial circum stances and with the expressed provision that further consideration would be given to a more compensatory adjustment that the shippers and the Railway Express Agency might agree upon.
During the year, the Express Agency sought authority to close 3 express offices. In 7 instances there was no opposition from the pub lic to the discontinuance of such services and the Commission authorised the closing of the offices at Allentown, Attapulgus, Dudley, Du Pont, Ideal, Montrose and Trenton. The Commission found that need for express service at Marietta was too great to permit the proposed discontinuance of such service at that point and denied application to close that office.
- 22

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BAIL FREIGHT
By application received in Hay of last year and amended in June of 19.70, the Central of Georgia Railway, Savannah & Atlanta Rail way and Southern Railway sought authority to publish on an annual volume basis a substantially reduced rate on crushed stone moving from Palmer to Pt. Wentworth, subject to provision that there be shipped an annual volume of not less than 100,000 tons and that the traffic move in open top cars subject to a carload minimum weight of 2 0 0 , 0 0 0 pounds and s u d ject to a minimum of 500 tons per shipment. The Commission received protests both from shippers at competing origins and from railroads serving such competing shippers and, under the circumstances, even though the proposal contemplated a reduction in rates, assigned the matter for hearing which lasted for three days in July and September. At the hear ing the applicant and supporting shipper undertook to justify the pro posal on the basis of a large continuing movement anticipated from Palmer to Port Wentworth, with the movement being in new, heavy-loading equip ment and with provision to be made at destination for unloading without stopping, thus resulting in less delay to carrier equipment and greater efficiencies in operation. The shipper involved complained of inability to secure sufficient railroad equipment to transport needed shipments of stone from competing origins and complained of slowdowns in his opera tions due to such inability to get that needed supply. Opponents to the proposal stressed the Commissions long-standing requirement of unifor mity in rates on this commodity permitting realistic competition between competing origins \?hile favoring no origin which might have the benefit of either single line movement or larger supply of equipment and strongly contended that disruption of such uniformity would damage the entire industry in the State as well as divert existing movements to this new origin solely because of the rate adjustment. The Commission found it. not reasonable to destroy its long-standing scale of rates on this com modity to effect only the diversion of the traffic here involved to another origin on another railroad at a considerably greater distance from the destination where the same reduced rate benefits could not be made available to competing producers at other points and on other lines. It did find reasonable, however, an adjustment in the Palmer-Pt. Went worth rate to accord effective recognition of the cost savings to the railroads and authorized a rate the same as that applicable from Ruby, finding that Ruby was only slightly less distance from Pt. Wentworth and that the rate from that point was subject to similar cost savings re strictions. The Commission held that such adjustment would result in giving the benefit of the cost savings almost equally to the shipper and receiver and to the carrier and would not at the same time unreasonably
reduce a rate advantage to which the competing shippers are entitled because of their geographic location.
By petition received in August and amended in December of last year, the railroads operating intrastate in Georgia sought authority to increase their freight rates and charges on Georgia intrastate traffic to the same extent as authorized by the Interstate Commerce Commxssion in Ex Parte 265. The increase sought was basically the 6 percent increase in existing rates and charges as finally authorized by the
23

Interstate Commerce Commission in Ex Parte 265 to be applied on inter
state traffic. At the hearing it was shown that the rate of return o

the principal Georgia railroads for the latest available 12-mont Peri

was only 4.43 percent and individually ranged from a low of 1.6 percent

to a high of 7.42 percent - these rates of return not considering the

effect of tax deferrals. Of particular significance in the c presentation was the large increase in costs incurred during iy/ ut. not totally reflected as annual costs in the expense computations su

mitted in the statements at the hearings. These increased cost items

(principally increases in wages and related costs but also reflecting

inflationary trends of other costs) x^ere in addition to t ose s own the Ex Parte 262 proceeding and were substantial in effect, amounting

to almost $100 million annually for the six Georgia Class I railroa or 7.7 percent of the annual freight revenue of those carriers. A -

though a number of protestants appeared at the hearing in opposi'

.

the application of the increase on the movement of commodities important

to them, the Commission found that the Georgia railroads were in need or

the additional revenue to enable them to continue to prwi. e a equ and efficient transportation facilities and services and that the recora

in the proceeding did not warrant exception from the increases as g

by the protestants. Accordingly, the applicants were allowed to increase

such rates to the same extent as had been approved almost a year earl

on interstate traffic with the intrastate increases to become ef* e c n not earlier than August 16th. On August 15 there was announced the ^

above-mentioned freeze on all prices and wages. Accordingly, e

.

creases authorized by the Commission in this proceeding were not allowe

to become effective on August 16 as originally authorized and, by

appropriate tariff publication, were suspended until further notice.

Following review of the entire record after receipt of initial guide

lines promulgated by the Cost of Living Council, the Commission in November reaffirmed its grant of increases in these rates as complying

with the purposes of the Economic Stabilization Program and such in

creases became effective on November 22nd.

There was discussed in detail in last year's report the orders of the Interstate Commerce Commission in Dockets 35190 and 3519 insti tuting an investigation into "...the matters and things presented... in petition filed on November 14, 1969 by the railroads operating m Georgia averring "...that the Georgia Public Service Commission has refused uo authorize or to permit increases in rates and charges on sand, grave , crushed stone, and related commodities moving in intrastate commerce corresponding to those authorized by this Commission in Ex Parte No. 25 , Increased Freight Rates. 1968, 332 I.C.C. 590 and 714, and tha-, e v e n ^ were the full increases sought to have been allowed, the rates resulting therefrom would be below the interstate level..." By further or<ier dated February 3, 1970, the Interstate Commerce Commission consolidated the two dockets into one proceeding and inadvertently broadened the^ original investigating order to include rates and charges on sugar m addition to the commodities listed in the original order. It appeared that there were two dockets filed by the railroad initiating the investi gation, one (apparently that in Docket 35191) attacking the basic level of intrastate rates on sand, gravel, crushed stone and related articles and the other (apparently that in Docket 35190) attacking the failure to

24

authorize increase in intrastate rates on those commodities and other commodities to the extent allowed on interstate traffic by the Inter state Commerce Commission in Ex Parte 259. As was reviewed in last year's report, the investigation was assigned for hearing beginning on June 22 of that year and the hearing therein lasted for two days during xchich time there was extensive evidence presented by all parties in volved. In April the Interstate Commerce Commission Examiner issued his proposed report and order in the proceeding in which he recommended that the railroad's application in Docket 35191 - the proceeding in volving the Georgia intrastate scale of rates on sand, gravel, crushed stone and related articles - be discontinued with the finding thac there had been shown no burden on interstate traffic caused by the difference between those rates and those applicable on corresponding interstate traffic. The Examiner, however, held for the railroads in Docket 35190 in recommending the full interstate increases be applied on the Georgia intrastate movements on which this Commission had partially denied^sue increases. In May the Commission filed exceptions to the Examiner s proposed report pointing out 18 reasons why the Examiner's recommenda tion in Docket 35190 should not be accepted. As could be expected, the railroads did not object to that portion of the Examiner's order recom mending the full increase in Docket 35190 but they did file exception to the Examiner's dismissal of their petition in Docket 35191. In June the Commission filed reply to the railroads exception defending the Examiner's findings in Docket 35191. No further order has been issued by the Interstate Commerce Commission concerning these dockets in 1971.
KAIL AGENCY SERVICE
The railroads continue to seek authority to modify their agency services at the smaller towns - continuing their contention that the revenues from such stations and the type of traffic moving to and^ from such stations no longer require the services of a full-time agent. This year the Commission processed 16 such applications and as its established custom adhered to the policy of deciding those applications on the need for and use of the services rendered rather than solely on the statistical showing of revenue versus cost. After finding that the public convenience and necessity no longer required the service of an agent at such points, the Commission authorized the discontinuance of agency service at Chattahoochee, Fairburn ana Warwick. Finding that there was need for continuance of agency service at Pavo and Zebulon, the Commission denied the railroads* application to discontinue the agencies at those points.
During the year, there were 5 more consolidations of agency service sought whereby one agent was proposed to provide agency service at two stations. The Georgia Railroad sought to establish such dual agency service at its stations of Thomson and Harlem, ac Milledgeville and Haddock and at Greensboro and Madison and the Seaboard Coast Line Railroad sought authority to establish the dual agency service at Ludowici and Walthourville and at Gilbert and Comer. After finding that the proposed service would be adequate to the needs of the public,
- 25

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the Commission approved these 5 dual agency plans.
There was reviewed in detail in the reports of the last three years the new type of agency service established in those years by the Central of Georgia Railway and the Seaboard Coast Line Railroad - that being the assignment of a "mobile agent" who would replace the resident agent at several stations and, by traveling via highway in a carrierowned vehicle between a base station and the stations to be served, would perform necessary agency functions at those points. During the year, the Seaboard Coast Line Railroad sought authority to establish such a mobile agency operation serving Pembroke, Claxton, Bellville, Collins, Lyons, Relca, Groveland, Daisy, Hagan, Manassas and Ohoopee. In addition, the Seaboard Coast Line Railroad refiled its application to establish a mobile agency operation serving Alley, Glenwood, Alamo, Soperton, Ochwalkee and Tarrytown. Following public hearings on both applications, the Commission, following finding that the operations pro posed appeared to be feasible, authorized the institution of these two mobile agency operations on a six-month test basis, subject to the same investigation procedures prescribed by the Commission in prior mobile agency proceedings.
In addition, during the year another railroad, the Southern Railway, adopted the mobile agency concept and sought authority to es tablish two mobile agency operations - one serving the towns of Bremen, Douglasville, Villa Rica, Tallapoosa, Winston and Temple and the other serving the towns of Lavonia, Roys ton, Bowman and Elberton and the non agency stations of Bowersville, Avalon, Vanna, Dewey Rose, Harper, Goss, Martin, Eastanollee, Canon, Hard Cash and Champion Wood Yard. Following similar findings that the applications proposed appeared to be feasible, the Commission authorized the institution of these two mobile agency operations on the Southern Railway on a six-months* test basis, again subject to the same investigation procedures prescribed by the Consnission in prior mobile agency proceedings.
One such mobile agency operation was made permanent during the year - that being the Central of Georgia Railway's operation serving the towns of Bowdon Junction, Yates and Newnan. The Commission found, after review of the results of the six-month trial operation of this mobile agency and following on-the-ground investigation by Commission represen tative, that the service in the manner performed and with the present personnel and volume of agency duties was adequate to the needs of the public at the affected stations.
It should be here pointed out that at the close of the year all of the mobile agencies previously authorized on either a trial or permanent basis were operating effectively and the Commission has not received a single substantive complaint against the services so being rendered.
26

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CONDEMNATION PROCEEDINGS AND ABANDONMENT OF OPERATIONS
In March the Southern Railway sought authority to institute condemnation proceedings to acquire certain property in Floyd County to be used in the construction of a connecting track between the Southern Railway*s Chattanooga-Atlanta main line and its Rome-Coosa main line. The connecting track was needed to replace an existing connecting track which had been already proved to be inadequate to handle movements be tween the two main lines - which movements in the near future were ex pected to substantially increase due to the proposed operation of unit coal trains to serve the Georgia Power Company*s steam generating plane on the Rome-Coosa main line. There was opposition to the proposal by two persons representing residents of the affected area in Rome, both objecting to the invasion of a residential area by freight train opera tions and to the attendant noise from such operation. Following hearing and lengthy investigation, both of the record and on-the-ground in Rome, the Commission found that the existing connecting track was inadequate to permit the movement between these main lines of traffic important to the railroad, to the industries involved and to the economy of Rome in general, that alternate interchange arrangements would not be practica ble from an operating standpoint (to say nothing of considerable inter ference with vehicular traffic in downtox'im Rome if a new connecting track were not constructed), that the location proposed for the new track was the most feasible and, under the circumstances, authorized the insti tution of the condemnation proceedings for the purpose sought.
In May the Southern Railway, Georgia Southern & Florida Rail way and Central of Georgia Railway, joint owners of the Macon Terminal Company, sought authority to abandon and dismantle their Macon Terminal Passenger Station and to abandon and remove all ancillary and secondary tracks serving that station. The application pointed out that since the discontinuance of the "Nancy Hanks" trains there was no remaining passen ger train service operating into and out of the Macon Passenger Station and that the station building was not being used for any freight purposes. Under the circumstances, the Commission approved the discontinuance of these facilities, subject to the provision that adequate substitute passenger station facilities be provided at Macon if the "Nancy Hanks" trains are restored or if other passenger train service is reinstituted to, through or from Macon by any or all of the applicants.
In September the Southern Railway made application for authori ty to institute condemnation proceedings to acquire certain property in Fulton County to be used for the construction of additional tracks in its South Yard facility in Atlanta. The new yard facilities were needed to provide additional capacity required to improve South Yard operations where the present capacity is 155 cars per day, making the railroad unable to handle the average of 200 cars per day which should move through this yard. Following demonstration at public hearing that the property proposed to be acquired would be used for such purposes and that it was the only feasible location in the area for such yard expansion and in consideration of the fact that the railroad had agreed with the City of Atlanta concerning relocation of a public park and several streets in the
- 27

area and with the Model Cities Agency of Atlanta concerning relocation of residents and concerning facilities to be established at the new park and a buffer strip on the west side of the enlarged yard, the Commission concluded that the applicants had satisfactorily shown that their appli cation complied with the requirements of the Georgia law and that the^ property sought was necessary and essential for the purpose of expansion of its South Yard and that such construction was required for the safe and essential conduction of the applicant's business as a public carrier and for public purposes and granted the authority sought.
WESTERN & ATLANTIC RAILROAD Under the new lease of the Western & Atlantic Railroad which became effective on December 28, 1969, responsibility for overseeing the operations of the Lessee on that property was transferred from the Georgia Public Service Commission to the State Properties Control^Commis sion. Accordingly, while the Public Service Commission will continue to provide any needed technical services in connection with supervision of the W & A Railroad property at the request of the State Properties Con trol Commission, it will no longer have the responsibility of reviewing additions and betterments to the railroad under the provisions of the new lease and, accordingly, there will no longer be contained in these reports annual review of such additions and betterments statistics.
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UTILITIES DIVISION
INTRODUCTION
The Georgia Public Service Commission issued a "total of 35 Orders after formal proceedings during the year 1971* These Orders involved Certificates of Public Convenience and Necessity for Gas and Telephone Companies, rate adjustments, the issuance of securities relating to capital structure and matters involving the general operation of the utilities subject to the jurisdiction of this Commission. Several Orders issued in 1971 were of vital interest to the consumers of utility services. Copies of these are enclosed herein for such detailed information as may be desired or found appropriate for interested parties.
Over the past few years, the citizens of Georgia using utilities' services have become more cost conscious and have dis played much greater interest in the formal proceedings in the Commission. This is indeed gratifying to the Commission inasmuch as its interested citizens are learning more about the operation of the Commission and how rates are changed, so that effected utilities will be able to earn a fair rate of return based on the value of the utilities' property devoted to public use. They also learn more about why utilities experience increases in taxes, materials, fuel, and labor, as well as the most prdominent cost, that being the cost of capital funds. The interested parties are given the opportunity of expressing their views, pro or con, toward the utilities application, at the hearings, as well as to inform the Commission of service deficiencies. The utility companies promptly correct these deficiencies to the satisfaction of each complainant.
Because of the rapidly increasing number of utility con sumers throughout the State, there has been a considerable increase in the filing of formal complaints and the Commission, as well as the utilities, strive toward resolving these complaints to the con sumers ' satisfaction as rapidly as possible.
Various civic organizations throughout the State have been addressed by the Commissioners and/or the Commission Staff for the purpose of acquainting the consumers with the services performed by this Commission. These organizations are informed as to the respon sibilities of the Commission in requiring utilities to provide adequate and satisfactory services that are compatible with reasonable and jsut needs of the public at rates which are fair and reasonable. The Commission, through its competent engineering and accounting staff can determine the accuracy of any electric and gas meter, the proper gas pressure of the gas service and the proper voltage level of the electric utility, as well as to determine whether or not a customer is being billed on the most economical rate applicable to the individual's service.
-29-

This Division must make many field investigations to determine the reasonableness of the extension of facilities that would provide the utility consumers with the service desired. Contrary to the beliefs of many Georgia citizens, this Commission does not guarantee any utility a set rate of return of profit. First, there is the no exercising of power over the management of utilities, such as its organization of salaries or wages, the size of its distribution facilities, or rights of way. When any utility expands its facilities along rights of way, many problems will naturally occur,- and the affected citizens often appeal to the Commission for assistance and every assistance is offered within the jurisdiction of the Commission.
The function of the Utilities Division is to provide the Commission with professional and technical services in order that the public responsibilities as required by law can be met. A competent technical, professional and administrative staff performs specific functions in the engineering, rate, auditing and accounting departments, in order to carry out the duties assigned to it by this Commission. The work of the engineering department consists generally of processing and analyzing all utility tariff filings which include rates, rules and regulations of electric and gas companies, as well as tariff revisions filed by Western Union. All applications for Certificates of Public Convenience and Necessity for telephone and gas utilities are processed and docketed for hearing. During the formal hearings, the professional staff conducts the cross-examination of the witnesses, and after the Commission reaches a decision, appropriate orders are prepared and issued. Oftentimes, field inves tigations have to be conducted to obtain such additional data that may be required to enable the Commission to reach a fair and just decision. The receipt, processing, evaluation, investigation, and final disposition of all complaints filed with the Commission against the utilities is one of the most important functions of this department. It is necessary that the staff involved in this work have specific training in order that the public may be given prompt and courteous service in the solution of their particular problems. Many electric, gas and telephone test instruments are utilized, for the purpose of obtaining detailed facts and certain technical data required. These expensive and delicate instruments are sent to the Laboratory of the U. S. Bureau of Standards periodically for calibration and issuance of certificates which indicate the tolerances of accuracy. All Federal Power Commission and Federal Communications Commission publications on certificates, rates, rules and regulations, and orders are reviewed carefully in order to evaluate same before submission to the Commission for such action as deemed appropriate.
The responsibility of assigning all rate and security applications for hearing, rests with the rate, auditing and accounting department. When exhibits are filed in these proceedings, a detailed analysis is made in order to determine if the rules of the Commission have been met and at the hearing, cross-examination of witnesses is conducted for the purpose of bringing out the facts in each case, thus aiding the Commission is reaching a fair and equitable decision.

Subsequent to the hearing and after the Commission reaches a decision, orders are prepared and issued to implement the decision reached. This department has the tremenduous task of auditing all monthly, quarterly, and annual reports received from the utility companies. It is necessary to check for errors in accounting, accuracy of data and conformance with the Uniform System of Accounts. When discrepancies are found, they are called to the attention of the appropriate utilities' officials for correction. Rate of return studies are made annually and submitted to the Commission for such action as may be deemed appropriate.
With the close of the calendar year of 1971 there were under the jurisdiction of this Commission the following number of public utilities:
Electric ............ 2 Natural G a s .......... *+ Telephone*........... 1+5 Radio Common Carriers 20 Telegraph . . . . . . 1 T r a n s i t .............. 1
* Includes h Co-ops.
The Utilities Division staff is authorized seventeen employees, such as engineers, accountants, auditors, stenographers and clerks, but during the year one of these positions was vacant.
This department experienced over 35% turnover during the year,
because of the unwillingness of qualified personnel to accept and hold the positions at the low salary level. The need for additional personnel is critical and the shortage has been reflected in the delay of preparation of formal proceedings, investigations of complaints as well as the prompt handling of the large volume of correspondence. As reported in previous years, resulting from a study of staff engineering positions within various agencies, upgrades in salary levels of the engineering positions as well as the accountant positions within the staff of the Commission were recommended.
The current members of the Utilities Division Staff are given on-the-job training so as to give them every possible benefit of a promotion and increase in salaries so as to improve themselves. Much time is involved in training an employee with the duties for which he has been employed, when employees resign to accept more lucrative positions in industry and/or Federal Government and other State Agencies. The information and service rendered are reported to the public and any errors which occur due to new employees not properly trained could be extremely embarassing to the Commission. The constantly increasing work load due to the tremenduous growth of the
31-

population in the State and expansion of facilities in nearly every county of the State is indeed placing added burdens on the employees of this Division. It is hoped that we will be able to convince the Budget Bureau and Members of the General Assembly to provide the necessary funds to permit the Commission their request for increase, so as to aid the Commission in a more effective manner, thus rendering a much more satisfactory and important service to the general public.
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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 35 decisions and orders during the year in proceedings involving utilities. A classification of the proceed ings in which formal opinions and orders were issued follows:

Applications for Certificates or Cancellation Thereof ......... 2

Applications for Authority to Issue Securities or Borrow Money. . 16

Rate Adjustment Proceedings....................................

Applications for Authority to Purchase and Transfer Utility

Properties........................

1

Applications fcr Amendments of Certificates .................... 1

Applications for Amendments of Rules and Regulations.......... .. 0

Show Cause Proceedings. . . . . . . . . ........ . . . . . . . . 3

General Orders. , .............................................. 1

APPLICATIONS FOR CERTIFICATES OR CANCELLATION THEREOF

Docket No. 2164-U February 4, 1971

Application of Atlanta Gas Light Company for a Distribution System Certificate of Public Convenience and Necessity to authorize gas distribution to Fannin County, Georgia.

Docket No. 2220-U June 28, 1971

Application of Thomaston Telephone Company for a Certificate of Public Convenience and Necessity to operate new toll line facilities.

APPLICATION FOR AUTHORITY TO ISSUE SECURITIES OR BORROW MONEY

Docket No. 2210-U May 10, 1971

Application of Atlanta Gas Light Company for

authority to issue and sell at negotiated

public sale not more than $15,000,000 aggregate

principal amount of First Mortgage Bonds,

% Series due

; and 80,000

shares of ______% Cumulative Preferred Stock,

$100 par value per share.

-33-

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Non-Docket November 23, 1971
Docket No. 2195-U Second Amendatory August 23, 1971
Docket No. 2195-U First Amendatory April 19, 1971
Docket No. 2231-U November 16, 1971
Non-Docket November 10, 1971
Non-Docket October 29, 1971
Docket No. 2224-U October 5, 1971

Application of Savannah Electric and Power Company for authority to issue and privately sell through investment bankers $15,000,000 principal amount of promissory notes on a unit basis, consisting of 33-1/3% thereof in fifteen-month notes and 66-2/3% thereof in nine-month notes.
Application of Georgia Power Company for authority to issue and sell $220,000,000 First Mortgage Bonds, 300,000 shares of Preferred Stock and 750,000 shares of Common Stock, and to issue $7,804,000 principal amount of First Mortgage Bonds, of a series to be designated, for sinking fund purposes.
Application of Georgia Power for authority to issue and sell $220,000,000 First Mortgage Bonds, 300,000 shares of Preferred Stock and 750,000 shares of Common Stock, and to issue $7,804,000 principal amount of First Mortgage Bonds of a series to be designated, for sinking fund purposes.
Application of General Telephone Company of the Southeast for authority to issue and sell at Twenty-five Million dollars ($25,000,000) of First Mortgage Bends at a public offering and to apply the proceeds thereof to repay short-term loans.
Application of Interstate Telephone Company, West Point, Georgia, for authority to borrow $600,000 principal amount from StrombergCarlson Corporation.
Application of Wilkes Telephone & Electric Company for authority to borrow an additional $444,000 from the Rural Electrification Administration ("REA"), Washington, D.C.
Application of General Telephone Company of the Southeast for authority to issue one million five hundred seven thousand, two hundred and twenty (1,507,220) shares of $25 par value common stock as a dividend and to issue and exchange one million, four hundred seventy-eight thousand seven hundred and eighty (1,478,780) shares of $25 par value common stock for stock of General Telephone Company of Alabama.
-3b-

Non-Docket September 29, 1971
Docket No. 2207-U First Amendatory August 4, 1971
Non-Docket July 15, 1971 Docket No. 2205-U June 28, 1971
Docket No. 2207-U June 17, 1971
Docket No. 2209-U First Amendatory May 4, 1971

Application of Camden Telephone and Telegraph Company, Inc. for authority to borrow an additional $500,000 from the Rural Electrifi cation Administration ("REA"), Washington, D.C.
Application of Westco Telephone Company for authority to borrow an additional $1,600,000 principal amount from the Rural Electrification Administration, Washington, D.C., and to issue and sell 270,000 shares of its $5 par value per share Common Stock to its parent, Western Carolina Telephone Company, as well as author ity to borrow $2,000,000 principal amount from The Lincoln National Life Insurance Company, Fort Wayne, Indiana, bearing interest at the rate of 9-3/4% per annum and to execute its Note as evidence of that indebtedness.
Application of Hart County Telephone Company, Hartwell, Georgia, for authority to borrow $65,000 principal amount from the StrombergCarlson Corporation.
Application of Public Service Telephone Company for authority to borrow an additional $1,100,000 from the Rural Electrification Administration, Washington, D.C,
Application of Westco Telephone Company for authority to borrow an additional $1,600,000 principal amount from the Rural Electrification Administration, Washington, D.C., and to issue and sell 270,000 shares of its $5 par value per share Common Stock to its parent, Western Carolina Telephone Company, as well as author ity to borrow $2,000,000 principal amount from The Lincoln National Life Insurance Company, Fort Wayne, Indiana, bearing interest at the rate of 9-3/4% per annum and to execute its Note as evidence of that indebtedness.
Application of General Telephone Company of the Southeast for authority to issue and sell at the par value of $25 per share four hundred and forty thousand (440,000) shares of its common stock; and to sell Twenty-five Million Dollars ($25,000,000) of First Mortgage Bonds, and to apply the proceeds thereof to repay short term loans, and for other purposes.
-35-

Docket No. 2209-U April 28, 1971
Non-Docket February 11, 1971

Application of General Telephone Company of the Southeast for authority to issue and sell at the par value of $25 per share four hundred and forty thousand (440,000) shares of its common stock; and to sell Twenty-five Million Dollars ($25,000,000) of First Mortgage Bonds, and to apply the proceeds thereof to repay short-term loans, and for other purposes.
Application of Commerce Telephone Company for authority to issue and sell to its parent, Mid-Continent Telephone Corporation, 13,000 shares of its Common Stock with a par value of $100 per share.

RATE ADJUSTMENT PROCEEDINGS

Docket No. 2187-U January 28, 1971

Application of Atlanta Gas Light Company for authority to revise rates to its customers so as to produce an increase in annual revenues of some $14,992,063.

Docket No. 2193-U February 9, 1971
Docket No. 2222-U First Supplemental

Application of Gas Light Company of Columbus for adjustment in its schedules of rates and charges.
Application of Georgia Power Company for authority to increase its rates for residential, commercial and industrial electric service.

Docket No. 2222-U November 4, 1971

Application of Georgia Power Company for authority to increase its rates for residential, commercial and industrial electric service.

Docket No. 2202-U First Supplemental December 2, 1971

Application of Georgia State Telephone Company for adjustment in its rates for local exchange service.

Docket No. 2202-U July 15, 1971

Application of Georgia State Telephone Company for adjustment in its rates for local exchange service.

Docket No. 2206-U June 28, 1971

Application of Public Service Telephone Company of Reynolds, Georgia, for authority to adjust its rates for local exchange telephone service.

Docket No. 2208-U First Supplemental December 21, 1971

Application of Western Union Telegraph Company for authority to adjust certain Intrastate Rates.

-36-

Docket No. 2208-U August 4, 1971
Docket No. 2199-U March 4, 1971

Application of Western Union Telegraph Company for authority to make effective in the State of Georgia selective intra state rate adjustments.
Application of Atlanta Transit System, Inc. and its wholly-owned subsidiary, Metropolitan Transit System, Inc. for authority to increase certain fares.

APPLICATIONS FOR AMENDMENTS OR CERTIFICATES

Docket No. 2234-U December 21, 1971

Petition of Citizens in the Schlatterville Community, Brantley County, requesting reestablishment of telephone service by Southern Bell Telephone and Telegraph Company.
Certificate of Public Convenience and Necessity, Waycross, Georgia Exchange

APPLICATIONS FOR AUTHORITY TO PURCHASE AND TRANSFER UTILITY PROPERTIES

Docket No, 2230-U October 29, 1971

Application of Chattanooga Gas Company for authority to execute and carry out an Agreement and Plan of Reorganization and Plan and Agreement of Merger in the form and manner as approved and authorized by the Tennessee Public
Service Commission.

SHOW CAUSE PROCEEDINGS

Docket No, 2200-U January 15, 1971

Georgia Public Service Commission vs./ Georgia Power Company, Savannah Electric and Power Company, Atlanta Gas Light Company, Gas Light Company of Columbus, and United Cities
Gas Company. ORDER TO SHOW CAUSE why the Commission should not prescribe a higher rate of interest on all consumers * deposits held by the gas and electric utilities operating in the State of Georgia.

Docket No. 2200-U May 26, 1971

Georgia Public Service Commission vs,/ All Electric and Gas Utilities operating in the State of Georgia. Show Cause why the Commission should not prescribe a higher rate of interest on all consumers' deposits held by such companies.

-37-

Docket No. 2200-U First Amendatory August 4, 1971
Non-Docket March 25, 1971

Georgia Public Service Commission vs./ All Electric and Gas Utilities operating in the State of Georgia.
GENERAL ORDERS
STATEMENT OF POLICY TO ALL INDEPENDENT TELEPHONE COMPANIES RE: Requirements for Profit Sharing and Pension Plans

-38-

LICENSES ISSUED FOR SERVICE OBSERVING EQUIPMENT

COMPANY

LICENSE NO.

Providence Washington Ins. Co.

9b

Universal Guardian Credit Corp.

95

Regional Creditors Service Agency , Inc 96

Leon Paine, Jr.

91

Accurate Business Machines, Inc.

98

Central Georgia Broadcasting Co., Inc. 99

Answerphone of Atlanta

100

Roadway Express, Inc.

101

Russwood of S.C., Inc.

102

Taggart's Driving School

103

Fisher Scientific Company

10b

Horizon Corporation

105

Connestee Falls Development Corp.

106

William Fulton Company

10 T

Marriott Motor Hotel

108

le 109

Inc. 110

Federated Credit Corporation

111

Builders Transport, Inc.

112

Peakload, Inc.

113

DATE ISSUED
lA/71 1/21/71 1/21/71 3/85/71 3/25/T1 3/25/71 3/25/71 U/9/71 6/9/71 +/20/71 5/12/71 5/28/71 10/6/71 10/6/71 10/6/71 10/6/71 10/29/71 llM/71 12/23/71 12/23/71

-39-

SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY
Station Activity - General
Total telephones in service for Southern Bell in Georgia at the end of 1971 were 2,192,552. This represents an increase in total telephones for the year of 152,911. The inward movement was 703,355
and the outward telephone movement was 5'50ikbb.
The improvement in service furnished to our customers continues , and as of the end of the year 88.1 percent of our residents had individual line service. Georgia continues to lead the other three Southern Bell served states in one party residence development.
The number of families with telephones in Georgia served by Southern Bell is holding at about 82 percent, however, second line usage in homes steadily increases and 2 percent of our users now have a second line. New services and equipment are being developed on a continuing basis in order to keep abreast of customer's needs for new and expanded service. During 1971 we made 300 tariff filings involving new or changed service offerings.
Direct Distance Dialing
Of the total number of main services in Southern Bell in Georgia, 92.2 percent now have access to the Direct Distance Dialing network and we are proceeding with plans to expand this service. The present customer-dialed long distance messages in 1971 was 52.1 percent of the total messages.
Construction
During the year 1971, Southern Bell again spent approximately one hundred and fifty nine million dollars in Georgia for new con struction to provide facilities needed to serve our customers.
Rural Service Improvement Program
During the year 1971, Southern Bell spent approximately $7,300 ,000 on its Rural Service Improvement Program. During the year almost one half of the existing eight party customers were regraded to higher classes of service. At the end of 1971 eight
party service represented only l.b percent of our residence customers
and business eight party is nearing full elimination.
Extended Area Service
In 1971 there were no changes in Bell exchange calling areas under the non-optional plan. A new optional plan called Extended Community Calling was put into effect with an experimental tariff allowing Forsyth customers with high calling frequencies to Macon to sign up for a special billing treatment. The ECC plans displace the high capital requirements of regular Extended Area Service and at the same time offers savings to the customers without penalizing those who have no need for an extended calling scope.
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Rate and Revenue Activities Among our tariff filings for 1971 were included a revision in
our eight party service to allow elimination when parties on a line reached four or less. A large number of inter-connection arrange ments were provided in the tariff which permits customers to use their own equipment for use with the telephone network. The amount and variety of customer provided equipment for use with the tele phone network is steadily increasing.
During 1971 we created the new exchanges of Panola and Johnson C o m e r and made numerous revisions in our exchange serving area boundaries and the associated maps on file with the Commission. These revisions are made necessary by the changing conditions of service availability and improvements in order to meet the growth needs of Georgia people in both the Bell and non-Bell areas. Employees and Wages
Southern Bell employs 18,1+00 people in Georgia, which is a slight decrease from January 1, 1971. Our employee turnover shows 5 ,9^5 new people were hired and 6,138 were lost.
During 1971, Southern Bell paid its employees in Georgia an
amount in excess of $180,100,000 in salaries and wages.
Taxes During the past y e a r, Southern B e ll in Georgia paid in lo ca l
and State taxes an amount in excess of $ 2 3 ,1 5 7 ,0 0 0 . In addition, Georgia telephone customers paid over $l+,862,000 to the State in sales ta x on th e ir telephone se rv ice .
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GENERAL TELEPHONE COMPANY OF THE SOUTHEAST
Station Activity - General
Total telephones in service for General Telephone in Georgia, at the end of 1971 was 163, 719 This represents an increase of
total telephones for the year of 8 ,967. The inward movement was
i+6,6l2 and the outward telephone movement was 37,61+5.
The improvement in service continues. As of the end of the year, 1*8.1 percent of the residential customers had individual line service. The percentage at the beginning of 1971 was 1+5*3 percent. The total one-party stations are now slightly over 6l ,000 and
represent 56 percent of the total main stations.
The number of families with telephones in Georgia, served by General Telephone, continues to increase. Now approximately 83.1 percent of all families have telephone service. New services and equipment are being developed continuously in order to keep abreast of customers needs for new and expanded service.
Direct Distance Dialing
Barwick, Boston, Broxton, Douglas, Milledgeville, Monroe, Perry, and Winder had access to the direct distance dialing network at the end of 1971 and the Company has a planned program for imple menting direct distance dialing in all exchanges. Customers in nonDDD exchanges receive the dial rate until DDD is established.
Extended Area Service
In 1971, the Dooly County Extended Area Service was established, as well as the Dalton-Chatsworth route.
Construction
During the year 1971, General Telephone spent in excess of $17 million to provide the facilities needed to serve its customers.
Multi-Party Elimination
General Telephone spent approximately million in gross con struction in our program of eliminating multi-party service, and for service improvement in the suburban areas. At the end of 1971 multi-party service represented 90 percent of the total customers served. The Company recognizes that multi-party service no longer meets the needs of its customers, and the remaining multi-party service will be eliminated by the end of 1973.
-k2-

Employees General Telephone employs 1,3^5 people in Georgia, which is
an increase of 232 since January 1, 1971. To obtain this increase
the Company hired 610 new employees and lost 378.
We continually evaluate our personnel requirements, with respect to service requirements, and make additions to our force as required.
-h3-

GEORGIA POWER COMPANY
At the end of December 1971, Georgia Power Company served 988,1^.6 customers within its 57,000-square-mile service area encompassing 153 of the state's 159 counties. Its residential customers averaged using 9 ,1**6 kilowatt-hours of electricity and averaged paying 1.73 cents for each kilowatt-hour of electricity used. The average usage and price for 1970 were 8,732 kilowatt-
hours at I .65 cents each.
On August 20, 1971, Georgia, Power Company's peak hour maximum demand occurred and amounted to 6,336,700 kilowatts. At the time of the demand, the utility was generating H,8*i6,500 kilowatts and receiving 5**0,000 kilowatts from associated companies and 950,200 kilowatts from nonassociated companies. The rated capability of Georgia Power's generating plants was 5,321,200 kilowatts. Projected reserves for the summer of 1972 for Georgia Power and its associated
companies are adequate, standing at approximately 16.5 percent, not
including hydroelectric facilities.
The utility's investment for 1971 in construction of new facil ities totaled $386 million and is estimated to expand to $*+57-l/2 million in 1972. Georgia Power's total requirement for funding new construction scheduled for 1972, 1973, and 197** will he more than $1-1/2 billion. During the same period the company's total expend
itures for environmental purposes will amount to $126 million.
During 1971, Georgia Power invested almost $l*+0 million in new transmission and distribution lines, constructed 279 miles of trans mission and 1,39** miles of distribution facilities. Of the total
transmission lines constructed, 167 miles were of 500-kv capacity
and are part of the utility's 500-kv system which extends from Plant Bowen near Cartersville north to interconnect with the TVA system, south from Plant Bowen to loop Atlanta, and south from Atlanta to connect Plant Hatch, near Baxley and the Alabama Power Company. The entire 500-kv system will improve the utility's reliability factor especially in the Atlanta area, the southeast's major industrial and growth center.
New generating units placed in commercial service by Georgia Power Company during 1971 were Unit No. 1 of Plant Bowen, near Cartersville, a 700,000 kw fossil-fueled unit; combustion turbine units totaling 236,000 kw at Plant McDonough, Bowen and Mitchell. Additional units under construction or in pre-construction phases during the year included Plant Bowen, Units 2, 3 and *+; Plant Hatch, near Baxley, Units 1 and 2; Plant Vogtle, near Waynesboro; Wallace Dam, near Milledgeville; Yellowdirt steam plant in Heard County; Plant Yates, near Newnan; the Atlanta Steam-heat plant. The total
generating capacity involved in these projects is 9 ,06**,000 kw, of
which 5+,000 ,000 kw will be in service by the end of 1975.
-UU-

Georgia Power Company's net income for 1971 fell more than 1^ percent below the net income of 1970. Its operating expenses rose by 13 percent, largely attributable to higher cost of fuel which increased by almost 3^+ percent during 1971* The utility's 1971 tax liability amounted to $1+3,688,000.
Financing during 1971 required raising a total of $1+09 ,1+22 ,000 from external sources, including $87,756,000 used for refunding a maturing first mortgage bond issue and satisfaction of sinking fund requirements. Including common equity funds from The Southern Com pany, $321,666,000 from external sources and funds from depreciation and amortization, investment tax credit, deferred income taxes, retained earnings and other internal sources made up the total used for construction.
Georgia Power Company appeared before the Georgia Public Service Commission for rate hearings beginning late in June of 1971, and extending into August. The increase requested amounted to 13.38 percent.
After hearings , the Commission issued an order allowing an 8 percent overall increase in jurisdictional revenue.
Due to the operation of the National Stabilization Program, the effective date of the order was stayed until Phase I of the pro gram was terminated on November ll+, following which the Commission considered the increase in light of regulations published by the Federal Government as part of the Phase II administration of the Stabilization Program. The increase was found to be in keeping with those regulations.
Georgia Power also has pending before the Federal Power Commis sion a rate case involving nonjurisdictional rural cooperative and municipal distribution systems customers.
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COMMISSIONERS
I BEN T. W IG G IN S . CHAIRMAN WILLiAM H. K IM B R O U G H , v i c e c h a i r m a n ROBERT C. IB O B B Y I PAFFO RD CRAWFORD L. P IL C H E R FORD B. S P IN K S
(Ititrgia `P u b l i c ^ c r b i c c
2 4 4 W ASHINGTON STREET, S.W .
Atla n ta ,Ge o r g ia 30 334

A. O. RA N D A LL, SECRETARY

November h9 1971
File No. 1931^ Docket No. 2222-U
In Re: Application of Georgia Power Company for authority to
increase its rates for residential, commercial and industrial electric service.___________ _____________ .
APPEARANCES

For the Company:
Tench C. Coxe, Attorney Allen E. Lockerman, Attorney Cameron F. MacRae, Attorney Carl D. Hobelman, Attorney L. Sanford Reis, Consultant William G. Stott, Consultant Wallace W. Carpenter, Consultant William R. Brownlee, Consultant James L. Green, Consultant Ross W. Hammond, Consultant Edwin I. Hatch, President Hal B. Wansley, Financial Vice President
For the Public:
Representing the Georgia Textile Manufacturers Association, Charles L. Gowen, Attorney Kirk McAlpin, Attorney John Pickens, Attorney Michael Drazen, Drazen Associates, Inc. Maurice Brubaker, Drazen Associates.. Inc.
Representing the Department of Defense and Other Executive Agencies of the Government: George J. Polatty, Attorney Peter Q. Nyce. Jr., Attorney Curtis Wagner, Attorney Capt. Richard A. Peterson, Attorney
Representing Allied Chemical Corporation: Barry Phillips, Attorney Thomas Shelton, Attorney J. D. Humphries, Attorney

Docket No. 2222-U

2.

For the Public: (Continued)

Albert G. Norman, Attorney, representing Atlanta Gas Light Company Howell Hollisa Attorney, representing Gas Light Company of
Columbus L. Clifford Adams5 Jr., Elberton, Georgia, representing the Power
Section of the Georgia Municipal Association, City of Albany Sidney L. Moore, Jr., Attorney, Atlanta Legal Aid Society,
representing Mrs. Ethel Matthews, Atlanta Domestic Workers Union, Mrs. Dorothy Bolden, Mrs. Pinky Stinson, and Georgia Welfare Rights Organization L. W. Wilson, representing the United Transportation Union Hillian D. Barker, representing the United Auto Workers Union Clem White, Vice President, Columbia Nitrogen Corporation and
Secretary of Nipro, Inc. Mrs. Dorothy Bolden, representing National Domestic Workers
of America Herb Maybry, representing the CIO W. H. Etheridge, Brunswick, Georgia, representing Hercules, Inc. Mrs. Alfred Deitz, High Shoals, Georgia (A & K Investment Corp.)
J. B. Benton, Macon, Georgia John D. Harper, Macon, Georgia John Newsome, Augusta, Georgia Mrs. Roger McMillian Reeb, Atlanta, Georgia C. W. Woods, Augusta, Georgia Mrs. Nanny Washburn, Atlanta, Georgia Jack Struck, Riverdale, Georgia

For the Commission:
John Hinchey, Assistant Attorney General David A. Kosh, Consultant, Kosh-Glassman, Associates, Inc.,
Washington, D. C. R. B. Alford, Director Utilities Division Frank G. Heald, Chief Utilities Auditor Douglas N. Smith, Senior Utilities Engineer
BY THE COMMISSION:
On May 17, 19713 Georgia Power Company (hereinafter also referred to as "Georgia Power" or "the Company") filed an application with the Commission to increase its retail rates an average of about 1 in order to obtain an additional
$1+55000,000 per year in operating revenue. The Company also proposed significant
changes in its rate schedules, principally designed to reflect its contention that a substantial portion of its physical plant is maintained solely to meet its summer peak, but also intended to simplify the Company's existing rate structure. This application was assigned for hearing before the Commission beginning at 10:00 A.M., Tuesday, June 29 3 1971 In its notice of assignment, Georgia Power was directed to publish legal notice of the time, place and purpose of the hearing in each and every daily newspaper of general circulation in each of the cities served by the Company. Said notice was to appear not later than ten (10) days before the date set for hearing. Evidence of such publication was presented at the hearing. More over, the record shows that the Commission directed a letter to the mayor of each city served by the Company advising them of the receipt of the application and the date of the public hearing scheduled thereon.

Docket No. 2222~U

3.

In its application, Georgia Power represents that its retail rates
have not been substantially adjusted since 19^8, and further, that although the Company *s costs have continuously risen, until 1969-1970, it was able to
offset them by increased sales and operating economies. But, it is alleged,
since 1969 costs have increased so dramatically a rate increase must now be
sought. The Company also points to an unprecedented program of new construction which it contends must be financed from external sources at ever increasing capital costs. Georgia Power further contends a declining rate of return
(6.71$ at the end of 1970) on its rate base, threatening its right to seek
new capital under its Charter and Trust Indenture, and undermining its ability to compete for capital in the marketplace. Finally, the Company contends that unless the Commission grants the relief sought, its rates will be confiscatory depriving it of property without due process of law, in violation of the Four teenth Amendment of the United States Constitution, and Article I, Section 1, Paragraph III of the Georgia Constitution.
The application came on for hearing as scheduled and extended over
various portions of twelve days between June 29 and September 10, 19713 during
which time the Comission heard from nine Company witnesses and several intervenors, whose testimony fills over 2,200 pages of official transcript. Upon conclusion of the hearing, Georgia Power m s given until September 20, 1971 to submit its brief, and the intervenors were given ten days to reply. It appears that all briefs were submitted by October ^+, 1971? at which time the Comission took the case under advisement.
During the course of the opening phase of the hearing, Georgia Power petitioned the Comission for a temporary emergency increase to obtain $16,000,000 of the additional $^5,000,000 in annual operating revenue by January 31? 1972, in order to offset what the Company considered to be a rapidly deteriorating cost and revenue picture, and to meet certain revenue requirements in the Company* s Mortgage Trust Indenture for floating new bond issues. According to the earnings projections in this application, the Company will be prevented by the earnings coverage provisions of its Indenture from issuing $100,000,000 of additional bonds planned for March 1972 without the increase therein sought, since its earnings under present rates are already too low to permit the issuance of new preferred stock. As to this^ aspect of the proceeding, the Comission took no action on this request for interim relief due in part to the economic program instigated by the President of the United States.
The evidence pertinent to this matter covers many subjects and the most important issues of argument to be resolved in a determination of this Company's revenue requirement appear to be as follows1
Rate Base
(a) Use of year-end investment rather than average investment during the year
(b) Treatment of Construction Work in Progress (c) Treatment of Unamortized Investment Tax Credit Balance
Earnings Available for Return
(a) Adjustment of wholesale revenues to reflect anticipated rate increases

Docket No. 2222-U

k.

Rate of Return

(a) Use of The Southern Company's embedded cost of capital in lieu of Georgia Power Company's
(b) Method of computing cost of equity capital

Rate Design

(a) Design thereof to provide for the applicability on the Company's various customers of the amount of increase, if any, determined to be appropriate

The foregoing issues will be discussed:

Year End Investment vs Average Investment

It should be observed that this Commission in numerous other rate pro ceedings has used for the most part average investment in lieu of year-end invest ment for the purpose of synchronizing the revenues of the utility so involved with investment over the test-year period, but in certain instances it has also recognized to some extent in rate of return the disparity of earnings caused by the impact of large amounts of construction required to serve the people, as well as the inflationary costs of the funds to be obtained in the money market to pro vide for that construction. The Company contends that if its rates are geared to its average investment those rates will not supply revenues sufficient to enable the utility to earn whatever is authorized in rate of return. The Company further contends and the record shows that the relationship between Company's revenues and investment has been rapidly deteriorating due to inflation and enormous pre sent and expected plant additions, i.e., $1.1 billion in 1971*1973 Another contention is that high costs which come from the impact of inflation, along with a need to invest large sums to protect the environment, must be considered by the Commission, for if otherwise, a disparity in earnings will continue to exist, and the credit rating of the Company at the financial market may be impaired.
In further support of its contention that year-end investment should be used, the Company asks this Commission to adopt the rationale in the following cases.

Re Potomac Electric Power Company, 28 P.U.R. 3d 206, 2l8 (1959)
Re Florida Power Corporation, 99 P.U.R. (N.S.) 129 <>13^ (1953)
Re Public Service Company of Colorado, P.U.R. 3d l86 (i960) Re California Pacific Utilities Company, 71 P.U.R. 3d 270 (1967)

Intervenors, on the other hand, urge that the Commission, for purposes of this proceeding, should use average investment and point out that the Company in its presentation did not take into consideration the additional revenues which would result from its operation if otherwise.

Docket No. 2222-U

5.

Alter careful consideration of the average investment aspect of this proceeding, it is the opinion of the Commission that the unusually high amount of construction proposed by the Company at the present time and expected in the next two or three years requires the use of year-end investment in lieu of average investment in a determination of Company's earnings requirement. This order will so provide but, this finding is not to be considered as precedent for any other utility which may be involved in a rate proceeding before the Commission. Each and every such case shall be judged on its own merit.

Treatment of Construction Work in Progress

Under the philosophy of rate regulation, concepts of fairness and equity and the avoidance of unreasonable discrimination must be employed. More over, a utility is entitled to rates that are fair to it and not unfair to its customers in order that the utility will be able to maintain its financial responsibilities from the revenues to be derived from such rates. In this connection, there are two methods that are generally accepted in the field of regulation with respect to the treatment of construction work in progress. In the first case, the Commission has two appropriate roads it may travel

with respect to the treatment of construction work in progress dependent

upon the circumstances involved

The first is -- if construction work

in progress is determined to be appropriate for inclusion in the rate base, then

the interest capitalized on that construction work in progress must be included

as .other income available to the Company.

On the other hand, if the

Commission determines that interest during construction should be excluded

from the rate base then the interest capitalized on that construction

work should also be excluded as other income to the Company. It appears that

these basic principles of regulation have not changed. Hence, based on the

record in this proceeding, it is the opinion of the Commission that construction

work in progress should be included in the Company's total investment or rate

base, also that interest during construction should be included as other income

to the Company. This order will so provide.

Treatment of Unamortized Investment Tax Credit Balance

According to the evidence the Company in its total investment or rate base computation did not give effect to a reduction in that rate base for funds accrued and made available through the investment tax credit permitted under the terms of the Internal Revenue Act and, the Company has urged that it be per mitted to earn a rate of return on these funds. After careful consideration of this aspect of the proceeding, the Commission is of the opinion that since these funds which have been charged to the rate payers through tax normalization in the income statement and since they represent funds that are cost-free the said investment tax credit balance reflected on the Company's balance sheet should be deducted from the Company's total investment or rate base. The method under which this credit balance should be treated for rate making purposes is well stated in orders heretofore issued by this Commission and there is no need for further discussion of the matter.

Docket No. 2222-U

6.

Earnings Available for Return

In its presentation the Company made provision for an expected
increase of some $11,278,000 for an increase in revenues anticipated to he
received from its wholesale customers by reason of a rate proceeding now be fore the Federal Power Commission having jurisdiction over such rates. The Textile Intervenors, through Mr. Drazen and Mr. Brubaker, challenged Georgia Power's calculations of earnings available for a return on its investment on the basis that the Company's adjustment to earnings to reflect wholesale revenue is too small, and that such return should be based on average invest ment rather than year-end investment (test year 1970) as compiled by the Company. Georgia Power recently petitioned the Federal Power Commission for a wholesale rate increase. The Company's calculations of available earnings here, in this retail rate case, include the full annual revenue effect of the requested wholesale rate increase for all wholesale contracts which expire in the year 1971 The intervenors further contend that because Georgia Power Company has failed to present to the Georgia Public Service Commission detailed separation studies allocating all revenues and costs of service between retail and whole sale businesss the Company must adjust its earnings, in this its retail rate
case3 to reflect the entire amount of the wholesale revenue increase now sought
before the Federal Power Commission, including the full annualized amount of rate increases which will become effective as wholesale contracts expire pro gressively through the years 1972 through 1975 Georgia Power on the other hand contends that the intervenors' contention that a separation study is necessary is only a "smokescreen" and argues that there is no basis for the inclusion of revenues anticipated in future years through 1975 It should be observed that the Commission has always permitted consolidated presentation of rate base, expenses and revenues. Hence, it is the opinion of the Commission that the wholesale revenues reflected in the Company's presentation are reason
able and appropriate.

Rate of Return

Georgia Power seeks an 8.37$ rate of return on a December 31s 1970 year-end rate base. In this connection, the Company employed two consultants,
Mr. L. Sanford Reis, a financial analyst and Mr. William G. Stott, a banker
with responsibility for investment of $20 billion of trust and other funds, to
testify as to a proper rate of return. In addition to these rate of return consultants, the Commission employed Mr. David A. Kosh, Consultant, who also
gave testimony as to proper rate of return for the Company. Based on the
evidence presented by Mr. Reis, he determined that the Company's common stock
should earn 13-l/2$ and that its overall rate of return should be in the range
of 8-1/2$ to 8-3/1$, while Mr. Stott presented evidence on behalf of the Company which indicated that in his opinion the Company's overall rate of return should
be at the level of 8.6$.

As to the findings with regard to rate of return by the foregoing two witnesses, Mr. David A. Kosh, on the other hand, presented evidence which showed that in his opinion the Company's common stock should earn in the range of 10.75$ -- 11.00$. It was further the opinion of Mr. Kosh that based upon his studies, the fair rate of return to the Company would be at the level of 7"3/*+%

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Docket No. 2222-U

7.

In this case, as in almost all utility rate cases, the question o fair rate of return looms as a major issue and as set forth hereinabove we ave three very well qualified and expert consultants who are, according to he record, in disagreement with what the proper rate of return should be for eorgia Power Company for purposes of this proceeding. Because of this confliction, we shall exercise our judgment as to what the proper rate of return should e ase upon all of the evidence presented in this proceeding and this order wi so
provide.

This Commission is fortunate in having a comprehensive record on this important issue. The testimony was complete and the cross examination searc m g . The result was to highlight certain basic differences both of principle an application.

The principal witnesses followed the traditional approach of combining the costs of debt, preferred and common in order to arrive at the overal cos of total capital, and from that estimate the fair rate of return.

The costs of debt and preferred pose no problem, and we need not com ment as to these but, the cost of equity is a different matter, and it was o ly disputed.

The testimony of Mr. Stott unfortunately provided us with little assist ance. He gave an opinion, and cited a long list of matters that should be con sidered in ascertaining the cost of equity. "What we need however, is an exposi tion how such consideration can be translated into a cost of equity.

Mr. Reis used the classic comparable earnings test. "What troubles us
with his testimony is that the basic ingredients were missing; there was no indication of similarity of risk as between the allegedly comparable group an Georgia Power; neither was there a showing that the rate of earnings realized by these comparables was no more than just and fair. As a result, we cannot
accept his opinion that 13.5$ is the cost of equity, but we will consider it
along with other evidence.

Mr. David A. Kosh, the Staff witness, based his finding of the cost of
equity on the Discounted Cash Flow (DCF) method, a method now widely accepted. (Washington Utilities and Transportation Commission v. Pacific Northwest Tele
phone Company Cause U-988O; New England Telephone and Telegraph Company,
Docket No. 102U, Rhode Island; Louisiana Public Service Commission v. South
Central Bell Telephone Company, Order No. 10531-A, and others.)

He found that 10.75$ to 11$ was a reasonable cost of equity.

After giving consideration to all the evidence presented, it is our opinion that the cost of equity to Georgia Power Company is approximately 11.

We are aware that the cost of new debt has been declining in^recent months, but it is still substantially above embedded costs, hence the issue of new debt will act to increase the cost of capital. Whether inflation is or will soon be controlled is a most vexing question. As a result, we must expect that rates designed to produce a given rate of return, based on the past ten years, will most likely not produce such a rate even in the near future.

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Docket No. 2222-U

8.

It is our conclusion, therefore, that rates he designed to produce, during the test year, a rate of return of 795$* Such rates, we believe, give the Company a reasonable chance of realizing the full cost of capital as derived above. As such, these rates will achieve a fair balance between investors and consumers, and assure the flow of the capital required to pro vide good service to the people of Georgia, at a minimum reasonable cost.
Rate Design
Georgia Power presented testimony on rate design through Wallace W. Carpenter, Director of Utility Rate Services for Ebasco Services, Inc., a consulting firm. Witness Carpenter proposed a single residential rate schedu e for all residential service in lieu of four such schedules which now exist. A residential customer would pay $13.80 per month for 750 kilowatt hours, which is approximately the present average consumption on the system, as opposed to^ $11.22 to $11.98 under present rates. Since Georgia Power's greatest demand is in the summer, the rate contains a summer-winter price differential to encourage more winter use. In addition, according to Witness Carpenter, customers whose summer peak demand gives rise to new plant facilities should pay more for ser vice than those whose demand occurs "off-peak." Georgia Power contends that its rate design is intended to tie the price of service more closely to the cos of that service.
The proposed residential rate R-l increases the price paid by small
users (200 to 600 kilowatt hours) by 18$ to 26$. According to Witness Carpenter,
this includes air conditioning customers whose demand peaks in the summer, and they should receive a greater increase than electric heating customers whose use is more off-peak." Further, according to Witness Carpenter even the new proposed residential rate will not cover the cost of serving low-use customers.
Witness Carpenter gave further testimony with respect to changes pro posed in the general service and industrial rate schedules which produced a lesser increase than on the proposed residential schedule R-l. A new proposed schedule B-ll for limited general service would replace existing rate schedule B-10-B (Counted Demand) which appears to meet the Commission's requirements as set forth in Docket No. 2027-U providing for kilowatt demand of customers load being metered and such kilowatt demand used for billing purposes.
During the course of this proceeding intervenors voiced objection to the rate structure proposed by Georgia Power stating that in their opinion certain of the rate classifications made a part of that rate structure were discriminatory. This aspect of the proceeding has been thoroughly studied by the Commission and corrections will be ordered by the Commission where deemed appropriate.
In its presentation of evidence, the Company submitted, among others, an exhibit showing its alleged investment in plant and facilities. This evidence and as derived by the Commission is as follows?

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Docket No. 2222-U

9.
Balance As of December 319 1970

Company_______ Commission

Electric Plant in Service Less-Reserve for Depreciation Net Electric Plant in Service Electric Construction Work in Progress Net Electric Plant Less-Contributions in Aid of Construction
Deferred Income Taxes Unamortized Investment Tax Credit Balance Balance Plus-Working Capital, Etc. Material and Supplies Prepayments Other Than Taxes Cash Working Capital Minimum Daily Bank Balances Less-Working Capital Provided by Postponement
of Accrued Taxes Total Investment or Rate Base

,51+0 ,979,768 $ 1 .540,979>768

314,342,710) ( 314,342,710)
fT7226,637,058 1 ,226,6377058

198,294',14141

198,.29.4,44-.1

424,931,499 17424,931,499

2,764,337) ( 2,764,337) 81,982,736) (` 81,982,736)
_______ 0- ( 19,229,053) 0)1n 1Ak iioS iff"T OOA qc:c: q7Q

$ 18,799,777 $ 18,799,777

401,977

401,977

20,954,922

20,954,922

5,479,242

5,479,242

( 2,876,564) ( 22,761,049) $ 1,382,9437780 $ 1,343,830,242

( ) = Negative Amount

The Commission has deducted from the Company* s total investment or rate base $19,229,053 for the Unamortized Investment Tax Credit Balance as shown by the Company's books and accounts. This is consistent with what has been discussed hereinbefore since these funds are cost free to the Company by reason of normalization in the income statement. Further, the Commission has deducted from the Company's total investment or rate base $22,761,01+9 or> $19,88^,^85 in excess of what the Company deducted for working capital provided by the postponement for aecured taxes. The amount determined appropriate by the Commission is based upon an analysis of the monthly activity in the taxes accrued account of the Company for federal and state income taxes, ad valorem taxes, and franchise taxes.

The following sets forth pro forma electric revenues and expenses of the Company as found appropriate by the Commission.

Pro Forma

Electric Total Operating Revenues Total Operating Expenses Net Revenues Before Federal,
State and Franchise Taxes Less - Federal, State and Franchise Taxes Operating Income Plus - Interest on Construction Capitalized Earnings for Rate of Return

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278,3^5^91
157^61,1+55 53,979,701
$ 103,^817755 12,302,5^2
$ 115,7 1+,2"96

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133,350,219 1+3,818,257 $ 94,531,902 12,302,5^2
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Docket No. 2222-U

10.

According to the evidence , total electric operating revenues of the Company for the test year ended December 31? 1970, amounted to $379,529,166.
To these revenues the Company added $56,277,780, resulting in pro forma revenues of $*+35,8o6,9*+6. This total increase in operating revenues includes the effect of a $*+5,000,000 requested increase in revenues from rates proposed
in the instant application as well as an increase of $ll,2*+6,730 expected from
a rate increase now pending before the Federal Power Commission on sales for resale to municipalities and rural cooperatives and, an expected increase of $31,050 in other revenues by reason of additional compensation for collecting
the 3% Georgia Sales Tax.

Total operating expenses for the year ended December 31? 1970,
amounted to $300,689,187, including amounts for federal and state income
taxes, franchise and other taxes. The record shows that these expenses were
pro formed to the level of $332,325,192 by reason of expected increases in
variables of expense such as, increased wage and fringe benefits, insurance,
depreciation and taxes. Deducting these total expenses from the said pro forma
total revenues of $*+35,8o6,9*+6, leaves electric operating revenues of
$103,*+8l,75*+. To this sum was added $12,302,5^2 of other income representing
interest capitalized on construction, resulting in $115,78*+,296 0^ earnings
available for rate of return which,when related to the Company's total invest
ment of $1 ,382,9^3,780, sets forth a claimed rate of return of 8.37^.

The Commission having carefully reviewed the evidence in this matter is of the opinion that the Company will require an increase in rates in order to maintain its financial responsibilities. As set forth hereinbefore, rates authorized in this order should produce $25,888,76*+ of additional revenues in lieu of $*+5,000,000 sought by the Company.
O11 the Commission's total investment or rate base of $l,3*+3?830,2*+2, as set forth herein earnings of $106,83*+,50*+ as derived herein by the Commis
sion sets forth a rate of return to the Company of 795$ which is deemed reasonable and appropriate for purposes of this proceeding.

Finally, the Commission wishes to make it clear that the authoriza tion herein contained is subject to the price freeze put into effect on August 15, 1971, as part of the President's Economic Stabilization Program. "When the price freeze went into effect, the Commission had under consideration the Company's aforementioned application for an immediate emergency rate
increase of some $16 million of additional operating revenue by January 31, 1972,
claimed necessary by the Company to provide earnings coverage sufficient to permit it to issue $100 million of first mortgage bonds in March 1972. The Commission, realizing that it had sufficient time while the Company's rates were frozen to act on the request for the full amount of permanent relief sought, did not act upon the application for immediate relief. The Commission, however, recognizes that the Company's prospective earnings must be increased as soon as possible after termination of Phase I of the price freeze to a level which will support the Company's financing requirements. Accordingly, the Commission has acted on the application for a permanent increase, even though the price freeze is still in effect recognizing and ordering that the rates herein authorized may be put into effect only when and as consistent with the requirements of the Price Commission and any other agency duly established under the President's Economic Stabilization Program with jurisdic tion over public utility rates. Such action is in the best interest of the Company, its customers and the future economic welfare of the people of this State.

Docket No, 2222-U

11.

Wherefore, it is
ORDERED that Georgia Power Company be, and it is hereby authorized to file with this Commission revised rate schedules subject to the findings in keeping with this order, the same to be subject to final approval by the Commis sion following its review and study of such rates.

ORDERED FURTHER that upon review of those rate schedules and approval thereof by the Commission, such rate schedules shall become effective on meter readings made on and after approval of the Wage and Price Board or their suc cessors created under the President's Economic Stabilization Program.

ORDERED FURTHER that the increase authorized herein in the amount of^
approximately $26,000,000 shall be uniformly applied to the three main classifi
cations of customers namely. Residential, General Service and Industrial.

ORDERED FURTHER that jurisdiction over this proceeding is expressly retained for the purpose of entering such further order or orders as to this Commission may seem meet and proper.

BY ORDER OF THE GEORGIA PUBLIC SERVICE COMMISSION, this the kth day of November, 1971.

A. 0. RANDALL, SECRETARY

BEN T. WIGGINS, CHAIRMAN

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COMMISSIONERS
BEN T. W IG G IN S .c h a i r m a n WILLIAM H. K IM B R O U G H , v i c e c h a i R M AN ROBERT C .IB O B B Y I PAFFO RD CRAWFORD L. P IL C H E R FORD B. S P IN K S
(Ifurgia public j s w b i
2 4 4 WASHINGTON STREET, S.W.
At l a n t a ,G e o r g i a 3 0 3 3 4

A. O. RA N D A LL, SECRETARY

November l6 , 1971
File No. 1931^ Docket No. 2222-U
In Re: Application of Georgia Power Company for authority to increase its rates for residential, commercial and industrial electric service._________ ____________ __
FIRST SUPPLEMENTAL ORDER
BY THE COMISSION:
By its order of November U, 1971$ this Commission authorized the^ Georgia Power Company to increase its rates in the amount of 26 million dollars annually to be uniformly applied to the three main classifications of customers, namely Residential,, General Service, and Industrial. In such order, this Com mission made reference to the President*s Economic Stabilization Program.
On November 12, 1971$ the Price Commission, Honorable C. Jackson Grayson, Chairman, issued Rules and Regulations to implement Phase II of such Program. Section 300.016 of such Rules and Regulations is related to regulated industries and a copy is attached hereto. The effect of this section is to direct this Commission to review the rate increase authorized by its order of November U, 1971, to determine its consistency with the purposes of the Economic Stabilization Act of 1970.
The purposes of the Economic Stabilization Act of 1970 are to stabilize the economy, reduce inflation, and minimize unemployment (see Preamble to Executive Order No. 11615).
From the guidelines issued by the Price Commission it would appear
that our order of November b3 1971$ is consistent with the purpose of the
Economic Stabilization Program provided that as a result of our order
(l) The Company*s pre-tax profit as a percent of revenues will not be greater than the average rate of pre-tax profit experienced during any two of the past three fiscal years, and

Docket No. 2222-U
(2) The rate increase therein authorized is based on past cost increase.
(3 ) The rate increase therein authorized will have no
appreciable overall effect on the rate of inflation.
(h) The rate increase therein authorized will stimulate
the economy of the State and Nation. In the existing construction program of Georgia Power Company there are employed presently an additional ^-,557 People with an annual payroll of $6l97^-2?000. This is in addition to a substantial number of Georgia Power Company employees who would not be employed if this construction program was not going on. In addition to this, there is a substantial number of others in Georgia, and elsewhere, furnishing e materials and supplies necessary to this construction pro gram. Further, if Georgia Power Company is not required to curtail its construction program there will be an additional
3,500 people employed on announced plants for the immediate future at an annual payroll in excess of $50,000,000.
We have examined the increase authorized by our order and have deter mined that it meets the foregoing criteria. Accordingly, the increase is fully justified in the light of the Economic Stabilization Program and is con sistent with the purposes of the Economic Stabilization Act of 1970, as amended.
Wherefore, it is
ORDERED that the increase in rates authorized by our order of^ November 1971, be effected by increasing the gross revenues derived from
each class of service by 8jobeginning with bills rendered on December 1, 1971,
provided that such increase shall not apply to electric service rendered before November 1^, 1971.
ORDERED FURTHER that all other terms and conditions of^the Commission s order of November V,"l97l? not inconsistent with this order, shall remain in full force and effect.
BY ORDER OF THE GEORGIA PUBLIC SERVICE COMMISSION, this the l6th day of November, 1971.

A. . RANDALL, SECRETARY

BEN T. -WIGGINS, CHAIRMAN

ATLANTA GAS LIGHT COMPANY

Atlanta Gas Light Company served 19^ municipalities and
83 counties in Georgia with natural gas on December 31, 1971* Number of gas customers on that date was 637,686, an increase of
17,223 over the previous year-end figure. Of the increase, 16,203
were residential customers, l,0lU commercial and 5 industrial and
one public housing authority.

Operating Revonues

During the twelve-month period ended December 31, 1971 operating revenues increased $35,531,^88 to $187,839,095. Net Income increased $5,721,536 to $9,539,673 and earnings available
to common stock amounted to $2.11 per share as compared with $0.80
for the previous corresponding period. About one-half of the increase in operating revenues resulted from recovery of the higher cost of gas purchased by the Company from its suppliers through the purchased gas adjustment rider approved in February, 1970 by the Georgia Public Service Commission. The remainder of the increase resulted from a general increase in gas rates approved by the Commission effective January 28, in Docket No. 2187-U (copy of which follows), and greater sales to industrial customers. The increase in earnings was due principally to the increase in gas rates partially offset by increased interest costs and higher operating expenses.

Expenses'

Operating expenses for 1971 totalled $172,222,^72* an .
increase of nearly #30,000*000. Of this, cost of gas accounted
for $120,7^5,811 (or more than 70 percent), compared with
$101,696,887 in 1970.

year.

Construction expenditures amounted to-$2 1 ,067,068 for the

Docket No. 2187-U

During January, the Commission approved new rates for the
Company which were expected to increase annual revenues by about
$8.6 million or 6.1 %t The new rates increased cost of gas to approximately 500,000 residential customers by about 6% and to large industrial (interruptible) customers an average of about l6%,
Appriximately 90,000 residential customers in Savannah and other
developmental areas had a decrease in their gas rates averaging
17%. Following is the Commission's Order entered in Docket No. 2187-U

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COMMISSIONERS

CRAWFORD L. P ILC H E R

FORD B. S P IN K S

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2 44 WASHINGTON STREET, S.W.
At l a n t a , G e o r g i a 3 0 3 3 4

A . O. R A N D A L L , S E CRETARY

January 28, 1971 F ile No. 19367 Docket No. 217-U
In Re: Application of Atlanta Gas Light Company for authority to revise rates to i t s customers so as to produce an increase in annual revenues of some $ lU ,99 2 ,0 6 3 .----------
APPEARANCES
For Atlanta Gas Light Company:
Allen P ost, Attorney, Hansell, P o st, Brandon & Dorsey Albert G. Norman, J r . , Attorney, H ansell, P o st, Brandon &
Dorsey W. L. Lee, President and Chief Executive O fficer K. H. Turner, Vice President-Finance and D irector Ernest C. North, Consultant, Representing the firm of
Whitman, Requardt and Associates P. C. Avant, Chief Engineer L. G. Folsom, Vice President and Corporate Secretary N. Knowles Davis, Public U t i l i t i e s Consultant Robert S. Jackson, Stone and Webster Management Consultants,
Inc. Richard S. Johnson, Stone and Webster Management Consultants,
Inc.

For the Opposition:
Charles L. Gowen, Attorney Furman Smith, J r . , Attorney
Representing: Peachtree Generating Corporation Merry Brothers Brick Company Monsanto Company Babcock & Wilcox Company Georgia-Carolina Brick and T ile Company
E . Smythe Gambrell, Attorney Theodore M. Forbes, J r . , Attorney
Representing: Owens-Illinois, Inc. Southwire Company The William L. Bonnell Company, In c. Marquette Cement Manufacturing Company Southern Cement Company L .B .I. Quarries, Inc.

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Docket No. 2187-U

2.

Curtis L. Wagner, J r . Capt. Wolfgang Drescher, Attorney George J . P o latty , Attorney
Representing: Department of the Army and other Federal Executive Agencies
Edward J . Grenier, J r . , Attorney Thomas A. Lamar, J r . , Attorney
Representing: Sixteen (l 6 ) Kaolin Companies
Ronald L. Reid, Attorney Judge Floyd J . McCracken, Augusta, Georgia
Representing: Columbia Nitrogen Corporation
Francis Shackelford, Attorney Representing: Georgia Kraft Company
Alford Wall, Attorney Jim Moore
Representing: Georgia State AFL-CIO
William E. Deaton Representing: Savannah Port Authority Savannah Area Chamber of Commerce
Tim Maund Representing: Central Savannah River Area Planning and Development Commission
Honorable Millard A. Beckum, Mayor, City of Augusta Matthew Mulherin, Chairman of Richmond County Board of
Commissioners Richard L. James
Representing: The Greater Augusta, I n c ., Chamber of Commerce
Tommy C. Thompson Representing: A llied In d u strial Workers Union Augusta Federation of Trades
Arthur Key Representing: Employees of Merry Brothers Brick & T ile Company
William L. (B ill) Lanier Representing: Georgia Farm Bureau Federation
Frank L . Carter Representing: Georgia Textile Manufacturers Association, Inc.
Ethel M. Mathews Representing: National Welfare Rights Organization

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Docket No. 2187-U

3.

Jay Loeb, Attorney Representing: A tlanta Chapter of National Welfare Rights Organization
John Davis G aither, A tlan ta, Georgia Reverend Hershell Robinson, A tlan ta, Georgia Wilkie A. Jordan, A tlanta, Georgia Susie LaBore, A tlan ta, Georgia L o ttie M iller, A tlanta, Georgia J . S. Ward, A tlan ta, Georgia Haney Z e lle r, A tlanta, Georgia

For the Commission:
R. B. Alford, D irector, U ti liti e s Division Frank G. Heald, Chief U ti liti e s Auditor Winford P o itev in t, U ti liti e s Auditor

BY THE COMMISSION:
On September lb, 1970, Atlanta Gas Light Company (hereinafter sometimes referred to as the "Company") filed an application with this Commission for an adjustment in its schedules of rates and charges which would produce an increase in annual revenues to the Company of some $14,99 , 3. The Company was directed to cause notice of the time, place, and purpose of the hearing to be published in newspapers having general circulation within the areas served by the Company. Evidence of compliance with this directive was presented at the hearing. Hearing of this matter spanned eight (3) days, commencing on November 25, 1970, then recessed and continued on December lb, 17, 18, 1970; January 6, 7, 8, 1971, terminating on January 11, 1971.

In its application, the Company alleged that it had not had a

general rate increase since May of i960 and that since that date it had been

subjected to steadily rising costs. For example: the Company alleged that

on a per customer basis, its annual labor costs h a d increased from $ 17.11 to

$ 3 0 .81+; a n n u a l f r a n c h i s e p a y m e n t s h a d i n c r e a s e d f r o m 0 . 9 2 c e n t s t o g . b b ;

a n n u a l ta x e s , o t h e r t h a n i n c o m e t a x e s , h a d i n c r e a s e d f r o m +>3*95 0 , *

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.

annual costs per customer, exclusive of the cost of purchased gas, had increased

f r o m $ 26.91 t o $ 1+3 .8 6 .

In support of i t s ap p licatio n , the Company sponsored four^Company executives and four "outside" con sultants, who gave voluminous testimony accompanied by numerous exhibits on matters o f: Company P olicy, Accounting, Finance, Trended Original Cost, Reproduction Cost-New, Real Estate Present Value, Cost of C ap ital, Rate of Return, Depreciation R ates, Natural Gas Re
serv es, and Rate Design.

Mr. Ernest C. North, a consultant with the consulting engineering firm of Whitman, Requardt and A sso ciates, te s tif ie d with resp ect to a trende

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Docket No. 2187-U

h.

original cost study of the Company's utility plant. Mr. P. C. Avant, the Com pany's Chief Engineer, submitted a reproduction cost-new study of the Company s utility plant. Testimony and exhibits were presented by L. G. Folsom, Vice President and Secretary of the Company, who is in charge of land acquisition, with respect to the present value of the Company's land and land rights.

Mr. N. Knowles Davis, a private utility consultant, presented exten sive testimony and exhibits with respect to cost of capital, rate of return, and certain other matters, including the impact of the national gas reserve situation upon the Company's annual depreciation rate. Mr. Robert S. Jackson, of Stone and Webster Management Consultants, Inc., also testified with relation to cost of capital and rate of return. Finally, Mr. Richard S. Johnson, also of Stone and Webster Management Consultants, Inc., testified with respect to rate design and a trended original cost study.

During the course of this hearing, witnesses for the Company were

cross-examined by the various Intervenors, as well as by members of the Commission staff. This cross-examination brought out criticism of several adjustments and assumptions made by the Company in its request for additional

gross revenues of almost $15 million. In response to strong intervenor

^

opposition, to the prospect of the hearing's continuing well into^the Company's

heating season (November to April), and to rapidly declining earnings and plans for heavy long-term financing in the immediate future, the Company agreed

to reduce its request for additional revenues of some $15 million to the level

of some $11 million. Because this.-approach,,seemed reasonable to all of the

Intervenors and other parties of interest, the hearing was adjourned and the
matter taken under advisement by the Commission. In summary, the application
was amended to provide for some $11 million of additional annual gross revenues

as follows:

1. To reduce the proposed increase in Schedule N-1A as filed with
its application by twenty per cent (20$);

2. To modify Schedule N-2A so as to produce the same percentage of increase to existing customers as will be produced by Schedule N-1A as above modified;

3. To retain the existing developmental schedules (N-l-S, N-12, N-21, SNG-11+, N-2-S, N-13, N-22, SNG-15), modified, however, to reduce by
fifty per cent (50$) the difference that will exist between such developmental
schedules and Schedules N-1A and N-2A, as thus modified;
1*. To reduce the proposed increase in Schedules N-8A and N-10A as filed with the application by twenty per cent (20$);

5. To make proposed Schedule N-9A applicable to customers now on
Schedules N-9 and SN-9 and reduce the rate levels thereunder so as to produce
an increase in revenues of approximately $*+,500,000 from such customers,

6 . To provide that the Purchased Gas Adjustment rider shall continue
to apply to all rate schedules;

7. To provide that the competitive fuels provision of Schedule N-9A shall be eliminated;

Docket 2187-U

5.

8. To provide for the particular Firm Use Charge and rate blocks in
Schedule N-9A;

9. To provide that those customers presently on the Special Ammonia Products Plant Rate shall remain on the same rate schedule with, however, an additional charge of 0.15 cents per therm above the rate levels under Schedule N-9A for the Special Services rendered under such Special Ammonia Products Plant
Rate;

10.

To provide, finally, that existing rate schedules not referred

to above shall remain unchanged.

During its presentation, the Company reiterated the critical nature of its present financial condition and its need for a prompt decision in this proceeding. (These considerations evidently were responsible in part for the Company*s decision to amend its application at the hearing.) The Company pre sented evidence to show that because of its present earnings level;

(1) The return on the common equity declined from 8.08^> at June 3 0 , 1970
to 6.92io at November 3 0 , 1970;

(2) Its bond coverages had declined to a critical point;

(3) It anticipated an early need for additional financing, including a proposed equity offering;

(4) It was faced with a large construction program which was required in major part to supplement its peak shaving facilities to meet the firm require ments of its residential and commercial customers;
(5 ) The Company was in the middle of the heating season when the major
portion of its revenues are earned and that, unless it received immediate ^ rate relief, its financial position would be seriously damaged for its entire fiscal year.
Among the Company*s exhibits was a schedule setting forth the Company claimed rate base in the amount of $194,577,5^+1. TW-S rate base was developed using the end of the Company*s test period, June 30, 1970, as reflected on the Company *s books after the elimination of elements of rate base relevant to the St. Augustine operation. The elements of the Company*s claimed rate base are set forth below;

Elements of Rate Base
Utility Plant Less;
Accumulated Provision for Depreciation Customers Advances for Construction Contributions in Aid of Construction Accumulated Deferred Income Tax - Liberalized
Balance Add;
Attrition Allowance Working Capital Unamortized Underground Storage Exploration Cost
Total Rate Base

$238,836,151
$47,619 >61+3 792,973
6,668,505 14,694,562 69,775,683
$169,060,460
, $ 9,548,462 15 636,866 331,745 25,517,073 ~~ $1^,577,5*+!

Docket No. 2187-U

6.

In its original presentation, which involved rates estimated to produce
some $15,000,000 of additional gross revenues, the Company estimated in its pro
jection of pro forma revenues and expenses (Turner, Exhibit Number 2, Schedule
11, page 1 of 3 ) that its total utility income, including some $2ll+,809 for interest capitalized, would amount to some $16,379*372 Per annum, which, when related to the foregoing rate base of $191+*577*51+1 * would result in a rate of return of 8.6 per cent (8.6^).

FINDINGS BY THE COMMISSION

The evidence in this matter has been carefully considered by the Commission, and it is of the opinion that in lieu of a year-end rate base as developed by the Company such rate base should be developed on the average amounts of the components thereof invested for the test year. It should be observed that this procedure has been used by this Commission in numerous other^ major rate cases. Average investment or rate base for purposes of this proceeding
has been compiled as follows:

Elements of Hate Base Utility Plant Less: Reserve for Depreciation Net Utility Plant

Average for Year Ended June 30* 1970 $228,1+27,9+7
(1+1+.753.753) $183,67!+, 19!+

Less : Customer Advances for Construction Contributions in Aid of Construction Deferred Income Taxes Unamortized Investment Credit Unamortized Underground Gas Storage Cost
Balance

$ 792,1+88
6,588,23U
ll+,01+6,562
1,1+56,252
331*71+5

(23*215, 281) $l60,i+5b913"

Add: Material and Supplies Working Capital 1+5 days (Operations & Maintenance)
Less - Taxes Accrued Bank Balances Average Investment or Rate Base

$ 4,261,5+5

$3,735,221 (1,1+30,000)
'

2,305,221
3,933,732 '

. .
1 0 ,500 ,*+98
,3170,959,1+

( ) = Negative Amount

Utility plant in the amount of $228,1+27*91+7 excludes construction
work in progress in the amount of $2 ,692,866 upon which interest is capitalized.

The amount also excludes $4c6,330 applicable to Company's investment in its St.

Augustine properties. Moreover, the reserve for depreciation of $1+1,,753,753

excludes $21+!+,883 applicable to the Company's St. Augustine properties.

er

Docket No 2187-U

7.

giving effect to these adjustments, net utility plant is stated at the level of $183,67^,19^. Consistent with the regulatory policy of this Commission, we have deducted from the said amount of net utility plant $23,215,2 l,^repre senting amounts applicable to customer advances for construction, contributions
in aid of construction, deferred income taxes, unamortized investment ere 1 ,
and unamortized underground gas storage costs. Since the said unamortize underground storage cost is subject to amortization charged to the ratepayers, there appears to be no need to provide for return on that deferred expense. Deducting the said $23,215,281 from net utility plant of $183,674,194 leaves

a balance accounted for of $160,^58,913. To this balance the Commission as
added $^,261,5^5 for material and supplies and working capital net of taxes accrued of $2,305,221, as well as $3 ,933,732 for compensating bank balances

required to be maintained by the Company. The total of

^s

$10,500,U98, which sum, when added to the said balance of $160,458,913, resui s

in a total average investment or rate base for purposes of this prceeaing

$170,959,Ull. It should be observed that the Company's claim of some $9jv4o ,

for attrition is disallowed, and the foregoing figures give effect to that

finding. Also, the foregoing total average investment or rate base o

$170,959,1+11 does not include the CompanyTs claim, in its working capital re
quirement, the amount of $3, ^ 5,066, representing gas accounts receivable 30

days or more past due which would be subject to a delayed payment charge oi
one per cent per month of the unpaid balance of any bill not paid within^ 5 days, nor does it include the amount of $239,521+ claimed by the^Company m 1 s

working capital requirement representing prepayments. As to this aspect o

the proceeding, the Commission is of the opinion that these charges would not

be proper from the standpoint of the ratepayers and also because of the ac- ^

counting which would be involved in the course of verification by the Commission

of the results to be obtained from such an action if permitted to become ef

fective.

The following figures set forth in Column 1 the CompanyTs actual revenues under present rates for the twelve months ended June 30, 1970, a er the elimination of revenues applicable to its St. Augustine properties.^ o umn 1 also sets forth the Company's actual expenses for said year after giving effect to the elimination of expenses applicable to Company's St. Augustine properties, as well as, after adjustments, for certain increase!* <jnd dec^eas<ss in expense based upon known changes. Further, Column 2 sets or w Commission estimates the Company's level of gross revenues will b e t t e r giving effect to the rate increase authorized herein, as well as after ^giving to certain adjustments to reflect changes in the Company's^projection o ex penses, which changes in expense are deemed by the Commission as proper for
purposes of this proceeding.

Docket No. 217-U

Operating Revenues
Operating Expenses: Cost of Gas Purchased Other Maintenance Depreciation Amortization Taxes - Other than Income
Total Operating Expenses
Net Operating Revenue before Income Income Taxes
Net Operating Income Other Income Gross Income Plus - Interest During Construction Total Utility Income

Company -- Turner Exhibit 2, Schedule 11
Page One of Three Column 1 $142,326,438

Commission Column 2
$150,989^38

$ 90,526,1^7 26,105,868
3,775,898
7,856,367
(5 ,188)
4,014,131
$132,273,223

s

$ 10,053,215

992,569

$ 9,060,61+6
223,73^ $ 9,284,380
21^,809
$ 9,999,189

$ 90,526,1^7
25,414,833 3,775,898 6,457,767
(5 ,188)
4,014,131
$130,183j588
$ 20,805,850
6,489,316
$ 14,316,534 223,734
$ 14,5^0,268
-0-
$ 14,5'1-0,268

Operating revenues projected by the Commission in the amount of $150,989,^38 include $8,663?000 to be provided the Company from rates authorized
herein. A downward adjustment of $691?035 in the Company*s estimate of other
operating expenses is affected which reduces the level of that expense some
9^26,105,868 to the level of $25,A,833. This adjustment is occasioned by the
following expenses which are disallowed: namely, promotional expense in the
amount of $200,000, an anticipated postal increase expense of $100,000, fran
chise fees in the amount of $395,035 applicable to DeKalb County, $100,000 applicable to Company*s underground development program, less $104,000 as a
provision for increased franchise taxes of 1 .2$ of the increased revenue pro
vided herein. As to the said $100,000 applicable to Company's current under
ground development program, the Commission is of the opinion that from an accounting standpoint this item should be handled as a deferred expense until such time as the Company's current underground development program is completed
and the total cost of said development is reviewed for approval by the Com-
mission. Depreciation expense claimed by the Company in the amount of ^7,o5 ,3 (
has been reduced by the Commission to the level of $6,^57,767, or a reduction
of $1 398,600. It should be observed that in the Company's presentation 01
evidence it requested and submitted a study in support of increasing its current composite depreciation rate from the level of some d p to the level of
3.5f0 per annum. As to this proposal, the Commission is of the opinion that for
the remainder of the Company's current fiscal year and, in any event, until th Commission determines by a separate investigation that a different depreciation

Docket No. 21S7-IJ

9.

rate should be made effective and applied, the Company's present annual de
preciation rate of 2.9!o shall remain in effect. After giving effect to the
revenue increase provided herein and the expense reductions discussed herein, net operating revenues before income taxes will increase from the level of $10,053,215 to the level of $20,805,850. Income taxes by reason of these revenues and expense changes are estimated to increase some $5,^-96,7^7 to the
level of $6,^89,318. Deducting this amount for income taxes from net operating
revenues of $20,805,850 leaves a balance of net operating income estimated by the Commission of $1^4-,316,53*+* To this amount is added $223,73^- of other in come, which will result in gross income to the Company, under the Commission's projection, of $1^,5^0,268. Since we have eliminated plant under construction upon which interest is capitalized, consistency implies that the interest capi talized on that construction should also be eliminated in our projection. This has been done.
On the average investment or rate base computed by the Commission in
the amount of $170,959,^Li, gross income of $1^,5^0,268 per annum as estimated by the Commission should provide the Company with a rate of return of 8.51/0
per annum, which should enable the Company to meet its financial responsibili ties .
As to the evidence presented by the Company with regard to plant trended original cost or reproduction cost-new, this proposal is denied con sideration in its entirety by the Commission, since it has always been the policy of this Commission to adhere to the principle of original cost, such, in the opinion of the Commission, being representative of fair value or actual dollars devoted to the use of the public.
After careful consideration of this matter, it is the opinion of the Commission that the Company requires an increase in rates in order that its revenues will be adequate to meet its operating expenses at the level or levels estimated herein by the Commission. This order will so provide.

Wherefore, it is
ORDERED: That Atlanta Gas Light Company be and it is hereby authorized to file with this Commission revised rate schedules as hereinafter set forth, to provide an estimated increase in its annual gross revenues of some $8,663,000;
1. Combine existing Rate Schedules N-l, N-l-S, N-12, N-21 and SGN-lU into a new rate schedule to be designated N-l-A, which will produce an estimated increase in such annual revenues of $2,252,9^5*
2. Combine existing Rate Schedules N-2, N-2-S, N-13, N-22 and SGN-15 into a new rate schedule to be designated N-2-A, which will produce an estimated increase in such annual revenues of $893,226.
3 . Combine existing Rate Schedules N-6-S and N-8 (other than the
provisions thereof relating to multi-housing customers) into a new rate schedule to be designated N-8-A, which will produce an estimated increase in

Pocket No. 2187-U

10.

such annual revenues of $979 517^-.
b. File a new Multi-Housing Rate Schedule to be designated N-10-A,
to apply to all multi-housing customers presently served under existing Rate
Schedule N-8 and all customers presently served under existing Rate Schedule
N-ll, which will produce an estimated increase in such annual revenues of
$32^,101.
5. Combine existing Rate Schedules N-9 an<3- SN-9 into a new rate^ schedule to be designated N-9-A, which will produce an estimated increase in
such annual revenues of $H,213,911
ORDERED FURTHER: That the Purchased Gas Adjustment Rider shall con tinue to apply to all rate schedules.
ORDERED FURTHER: That any special rate schedule not referred to in the foregoing ordering paragraphs shall be consistent with this decision and the amended application of the Company.
ORDERED FURTHER: That said revised rate schedules shall be applied to all billings on and after the date of this order.
ORDERED FURTHER: That Atlanta Gas Light Company shall retain its|
present annual depreciation rate of 2 .9lo for the remainder of its current fiscal
year and, in any event, until the Commission determines by a separate investi gation that a different rate should be applied.
ORDERED FURTHER: That the Company's request for a delayed payment
charge of 1% per month of the unpaid balance of any bill not paid within twentyfive (25) days is hereby denied.
ORDERED FURTHER: That jurisdiction over this matter is expressly retained for the purpose of entering such further order or orders as to this Commission may seem meet and proper.
BY ORDER OF THE GEORGIA PUBLIC SERVICE COMMISSION, this the 28th day of January, 1971.

A. 0. RANDALL, SECRETARY

BEN T. WIGGINS, CHAIRMAN

Gas Supply from Pipeline Companies
The Company has long-term contracts with its three natural gas pipeline suppliers for maximum daily deliveries aggregating 85^,600 Mcf. These consist of firm service from Southern Natural Gas Company (Southern) of 737,500 Mcf per day, from Transcontinental Gas Pipe Line Corporation (Transco) of 107,600 Mcf per day and from South Georgia Natural Gas Company of 9,500 Mcf per day.
The Company also has contracts with Transco for underground storage service, for liquefied natural gas and for peaking service, an annual total of 135,000 Mcf.
The suppliers have indicated that the Company may expect no additional firm pipeline gas supplies for the next three or four years and that increase in peak requirements must be met by other means. In addition, curtailment plans initiated by Transco and Southern have emphasized the need for additional peak day supplies.
During the year, Transco curtailed gas to all its customers
by 15$ of contract demand, claiming the action was necessary to
maintain a constant flow of gas throughout the system. In November, Southern filed a curtailment plan with the FPC, which the Company continues to oppose along with the Commission, Georgia Power Company and Savannah Electric & Power. The plan diverts gas for which the Company has paid a demand charge to other Southern customers. The Company contends the plan is prejudicial since it provides that Southern would not deliver certain volumes of gas where such gas would be resold as fuel for electric generation and other industrial uses.
Peak Shaving
To supplement existing sources of gas supply to meet peak demands, the Company presently has under construction a liquefied natural gas plant adjacent to its propane plant at Riverdale, just south of Atlanta, During warm weather, natural gas from its
suppliers will be cooled to a liquid state, reducing it to l/600th
of its original volume, then stored in two cryogenic tanks until required during cold weather. When needed to meet peak loads, it will be vaporized and fed back into the system. It is anticipated that this plant, which will provide additional peak-shaving capacity of approximately 200,000 Mcf per day for five days from the first
tank, will be in service by the winter of 1972-1973.
The Company maintains eight peak-shaving plants which supply propane-air gas to its system to supplement the gas supply in very cold weather or in emergencies. Storage capacity of these
plants is 13,^56,1^0 gallons of liquid propane, an increase of 815,100 gallons in 1971 due to the addition of twenty 90,000 gallon
capacity storage tanks at the Gasco Plant in Atlanta. The maximum daily gas-making capacity totals 19^,3^-0 Mcf of natural gas equi valent and the number of days that full capacity can be maintained
without replacement of liquid propane varies from 3 to 10 days.

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Exploration
Georgia Gas Company, a -wholly owned subsidiary, activated
in November, 19715 has a one-third working interest in a gas
exploration- project in the Black Warrior Basin in northwest Alabama. Plans call for five wells to be drilled in the initial phase beginning in March, 1972. It is anticipated that most of the gas which may become available as a result of this exploratory venture will contribute to the Company's supply.
Financing
The public offerings of 15-million of 1-1/2% first mortage
bonds, due June 1, 1977, and 80,000 shares of 8.32$ cumulative preferred stock were announced in June.
The bonds were offered at 100.25 percent and accrued interest
to yield 7 .^-5%, while the preferred stock is priced at $100 per share,
to yield 8.32$, plus accrued dividends from June 1, 1971.
Customer Deposits
Interest on Customer deposits was increased from 1+.5 to 5$, effective July 1, as the result of an order by the Commission issued in Docket No. 2200-U. copy of which follows the Utilities Division Section of this Annual Report. The ruling also specified a new deposit refund procedure to be initiated January 1, 1972.
Rules Revisions
September 30, the Georgia Public Service Commission accepted revisions to the Company's rules and regulations. The revisions established new procedures for determining the amount of investment the Company would extend to each new customer and clarified other provisions.
Pipeline Purchase
An 80-mile petroleum pipeline was purchased from Plantation Pipe Line Company for conversion to natural gas. The line is expected to provide natural gas service to consumers in Meriwether, Upson, Crawford and part of Bibb counties where gas service has not been available heretofore.
Rate Increases by Pipeline Suppliers
The Company, with the Georgia Public Service Commission and Georgia Power Company, actively opposed 10 separate rate increase cases submitted by its three pipeline suppliers before the FPC. Increases which were imposed by the suppliers required that the Company pass along to Georgia consumers higher gas costs five times during the year under the provisions of the Purchased Gas Adjustment Rider. This amounted to an increase for residential customers of
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.82 cents per t h e m and to interruptible customers of .1*5 cents
per therm. (As a result of the litigation, by the end of 1972, the Company will have refended $10 million to Georgia Consumers).
Southern LNG Import Plan
Early in the year Southern proposed a plan for importing liquefied natural gas from Algeria and re-gasifying it for injection into the Southern System at a plant to be built in Savannah harbor. The Company opposed the original plan before the FPC for two primary reasons: (l) It would increase gas cost to our customers as much as 30$ over domestic gas and (2) Algerian political instability and hazards of an ocean voyage would make supplies highly unreliable.
In November, Southern submitted a revised plan which would allow its customers less dependence on the imported LNG and assured that Southern would take all steps necessary and possible to provide additional storage capacity on its regular system and protect its service in case of interruptions of delivery of the LNG. (The Company accepted the revised plan at hearings before the FPC in
early 1972).
Carolina Pipe Line Complaint
The Company joined the Georgia Public Service Commission and Georgia Power Company in further litigation to protest the natural gas supply for Georgia consumers when it opposed a complaint before the FPC brought by Carolina Pipe Line Company against Southern Natural Gas Company. Carolina contended that excess gas sold by Southern was not being alloted fairly amoung its customers. A portion of the gas in question was being delivered to Atlanta Gas Light Company and resold to Georgia Power Company to generate electric power in the State. Carolina wanted this gas diverted to South Carolina. (Case ruled mute by FPC, June 1972, since Southern curtailment plan case encompanes complaint.)
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GAS LIGHT COMPANY OF COLUMBUS
Expenditures for property additions during 1971 amounted to $629,931. Mains , service lines and other facilities required to extend gas service to 1,81+1+ new residential dwellings and businesses accounted for $357,^+63 of this total. Also included was $176,^1+1+ for ten 30,000 g.allon propane tanks which increased peak shaving
storage capacity by 36 percent. Distribution system improvements
and equipment additions and replacements accounted for the remainder of the year's capital expenditures.
Sales of gas totaled 11,191+,069 thousand cubic feet (MCF)
compared to sales of 11,260,602 MCF in 1970. This small decrease
in volume was due to 10 percent warmer weather during the heating
season. The decline of more than 50 percent in the military popu lation of Fort Benning over the past five years continues to affect sales growth.
The Company was serving 1+5,919 customers at year end, a gain of 1,018 over the previous year. The difference in this customer gain and. the 1,81+1+ new service connections extended during the year reflects an increase in dwelling vacancies and continued dismantling of substandard housing units.
Although the volume of gas purchased from Southern Natural Gas Company, the sole supplier, was slightly less than in 1970, the
cost rose from $1+,31+6,003 to $5 ,003,1+08, an increase of $657,1*05
or 15 percent. This higher cost was passed on to customers of Gas Light Company of Columbus under the provisions of the Purchased Gas Adjustment Rider which was approved by the Georgia Public Service Commission in 1970. Cost of gas during 1971 accounted for 57-5 cents of each dollar of revenue received.
The Company is investigating every means of supplementing its current supply of gas since Southern Natural Gas Company has notified all of its customers that no increase in contract quantities can be expected in the near future. Since the year ended the consulting firm of Arthur D. Little has been retained to make a feasibility study regarding a liquefied natural gas facility. If feasible, such an installation would enable the Company to continue to render service to new residences and businesses without an increase in contract quantity of gas from the pipeline supplier.
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COMMISSIONERS

BEN T. W IG G IN S . CHAIRMAN

WILLIAM H. K IM B R O U G H , v i c e c h a i r m a n

RO BERT C . IBOBBY-1 P A FFO R D

CRAWFORD L. P ILC H E R

FORD B. S P IN K S

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2 44 WASHINGTON STREET, S.W.
At l a n t a , G e o r g i a 3 0 3 3 4

A. O- R A N D A LL, s e c r e t a r y

February 9, 1971 File Ho. 19^62 Docket Ho. 2193-U
In Re: Application of Gas Light Company of Columbus for adjustment in its schedules of rates and charges.
APPEARAHCES
For the Company:
Howell Hollis, Attorney Richard Y. Bradley, Attorney Jack A. Bell, President S. C. Bishop, Vice President and Treasurer
Intervenors:
George J. Polatty, Attorney, Department of the Army Capt. Wolfgang Drescher, Attorney, Office of the Judge
Advocate General George P. Fermin, Third Army, Fort McPherson
For the Commission:
R. B. Alford, Director Utilities Division Frank G. Heald, Chief Utilities Auditor Winford Poitevint, Utilities Auditor

BY THE COMMISSION
On Hovember 2k, 1970, Gas Light Company of Columbus (hereinafter
sometimes referred to as the "Company") filed an application with the Com mission requesting authority to increase natural gas rates for residential, commercial and industrial service. This application was assigned for public hearing before the Commission beginning at 10:00 A.M. on December 23, 1970, at which time evidence in support of the application was heard. On motion of the Department of Defense which intervened in the proceeding, the hear ing was recessed to 10:00 A.M. on January 15, 1971, at which time further evidence was received. It appears that the Company caused proper notice of the time, place and purpose of the hearing to be published in the December 9th
and l6th, 1970 issues of the Columbus Ledger of Columbus, Georgia, a news
paper of general circulation in the territory served by the Company, and

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Docket No. 2193-U

2.

copies of said publication were submitted at the hearing as evidence that this requirement had been met. There was no objection to the application at the hearing other than the said intervention by the Department of Defense.

In its presentation of evidence, a witness for the Company contended among other things, that Company*s present rate schedules do not provide revenues adequate to offset increases in the costs of rendering service as well as adequate to keep the Company in a financial position deemed necessary for its continuing to provide adequate and proper service to its customers. It was further represented that the rates proposed would provide the Company
with additional gross revenues of some $556,35*+ Per aniTUin? an<^ "k&at such revenues were required to meet said increases in costs of service as well as provide earnings at a reasonable level on its investment in plant facilities.

The record shows that under the rates proposed, the average in crease to residential customers would be slightly less than Ul^ per month, while moderate increases for rates for industrial and commercial users would also be effected.

At the hearing the Company introduced 9 financial and statistical exhibits and a witness for the Company testified in support of the informa tion set forth thereon. Two witnesses testified in behalf of the Department of Defense. This testimony was pertinent to alleged discriminatory inter ruptions of service at Fort Benning as compared to such interruptions of other industrial customers as well as, certain aspects of the financial operations of the Company.

According to the testimony, the earnings of the Company have steadily declined because of several factors, principally the fact that operation and maintenance expenses increased substantially and interest rates on bank loans have undergone a drastic increase. The Company pro duced evidence comparing the cost per average customer with that of 7 other gas distribution companies in the southeast, indicating that its costs are substantially lower than the average of those other companies. It also produced evidence of the rate of return on its investment as well as that on its common stock, indicating that the return sought by the Company is in line with that of comparable gas distributors. It was further brought out that the current high return on bonds and other debt capital makes it essential that the return on equity capital be kept at a relatively
attractive rate.

The Company*s request for rates which would produce a return of
% on an average investment for the test period of $8,1+15,^69 is predicated
upon computations involving rate base components regularly accepted by this Commission. Said return includes the effect of alleged dollar requirements to service capital and to retain as surplus a reasonable amount for future expansion. The computation also involves adjustments to give effect to normal weather conditions based upon a comparison of the number of degree days during the test period ending August 31? 1970, which encompasses the heating season 1969 to 1970, against the average of the twenty-year period
ending with the test period.

Docket No. 2193-U

3.

Witness for the Company pointed out that since the Company serves only in one relatively small area with almost complete dependence on Fort Benning and the textile industries, there is a considerably greater ris^ than in the case of a company serving a wide geographical area with a di versity of industries and further, that the military population at Fort
Benning had decreased by 51$ in the 12 months ending September 30, 197 ?
resulting in a substantial decrease in the number of families served by the Company. Employment in the textile industries of Columbus had also declined in the same 12-month period, according to this witness.

It appears that the Company's rates have not been increased since 1962, except for adjustments due to increased costs of gas pur chased from Southern Natural Gas Company. The Commission recognizes that the inflationary spiral in the general economy has caused considera ble increases in wage rates and other expenses during that interval and that, while interest rates have declined to some extent, they are still
far greater than they were in 1962.

According to the evidence, the revisions in the proposed rate schedules other than Schedule B, merely set forth the change in the rates per ccf or mcf and the change in minimum bill provisions. Certain changes in Schedule B are proposed which the Commission finds to be just and equitable.

Regarding the intervention by the Department of Defense, the Commission finds that a very substantial portion of the charges for service at Fort Benning is attributable to firm contract demand for heat ing of residences, barracks, and similar buildings so that applying the same rate to Fort Benning as to interruptible customers in Columbus is just and equitable.

The evidence in this matter has been given careful study by the
Commission and it is the opinion that the Company will require an increase
in rates but not to the extent requested in the application. Whereas, as
set forth hereinbefore, the gross revenue increase sought by the Company
amounts to some $556,35*+ per annum in order to provide a nine per cent (9lo) rate of return on its average investment of $8,*+15,*+69 the Commission finds that a gross revenue increase of $*+87j *+87 is adequate and that such increase will provide the Company with a rate of return of 8.6$ on its
average investment of $8,*+15,*+69.

Wherefore, it is

ORDERED that revised rate schedules shall be filed with this Commission to reflect the increase in gross revenues authorized in this order.

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Docket No. 2193-U

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ORDERED FURTHER that the said revised rate schedules shall be applied to all billings rendered on and after February 10, 1971*

ORDERED FURTHER that the Purchased Gas Adjustment Rider hereto fore approved by this Commission shall continue to apply to all rate schedules.

ORDERED FURTHER that jurisdiction over this matter is expressly retained for the purpose of entering such further order or orders as to this Commission may seem meet and proper.

BY ORDER OF THE GEORGIA PUBLIC SERVICE COMMISSION, this the 9th day of February, 1971.

A. 0. RANDALL, SECRETARY

BEN T. WIGGINS, CHAIRMAN

Appendix I Docket No. 2193-U
DISSENTING OPINION of
COMMISSIONER BOBBY PAFFORD
I disagree with the rate of return found by the majority of
the Commission for purposes of this proceeding. In my opinion, a rate
of return of 8.5$ is entirely adequate and I see no reason for pre
scribing or finding a rate of return in excess of 8.5$ that the majority
has found. I might further add that this is the highest rate of return granted by this Commission in recent years for any Gas Company under its jurisdiction. I believe also this sets a dangerous precedent as it comes at a time when interest rates are on a decline and it would appear to me that, under these circumstances, we should not approve rates that provide a record high.

DIRECTORY 0 F
G E O R G I A TOWNS AND CITIES SERVED WITH N A T U R A L GAS
PREPARED BY: GEORGIA PUBLIC SERVICE COMMISSION AS OF MARCH 5, 1971

CITY
Acworth Adairsville* Adel Ailey Alamo Albany Aldora Allenhurst Allentown Alma Alpharetta Alto Americus Arcade Ashburn Athens Atlanta Auburn Augusta Austell* Aver a Avondale Estates
Bainbridge Baldwin Ball Ground Barnesville Baxley Bellville Berkeley Lake Bishop Blackshear Blakely Blythe Bogart Bowdon Bowersville Bowman Braselton Bremen Brunswick Buchanan (Buena Vista) Buford* (Butler) Byron
Cadwell Cairo Calhoun Camak Camilla Canon

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OWNERSHIP OF SYSTEM
Atlanta Gas Light Company Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company
Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal (Toccoa) Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal Municipal Municipal (Warner Robins)
Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal (Toccoa)

SOURCE OF NATURAL GAS
Southern Southern South Georgia Southern Southern South Georgia Southern Southern Southern Southern Southern T ra n sco n tin en ta l South Georgia T ra n sco n tin en ta l South Georgia T ra n sco n tin en ta l Southern T ra n sco n tin en ta l Southern Southern Southern Southern
South Georgia Transcontinental Transcontinental Southern Southern Southern Transcontinental Transcontinental Southern South Georgia Southern Transcontinental Southern Transcontinental Transcontinental Transcontinental Southern Southern Southern South Georgia Transcontinental South Georgia Sou the rn
Southern South Georgia Southern Southern South Georgia Transcontinental

CITY
Canton Carl Carlton Carrollton Cartersville* Cave Spring Cedartown Centerville Chamblee Chatsworth Chester Chickamauga Clarkesville Clarkston Claxton Cochran Colbert College Park Columbus Comer Commerce* Conyers Cordele Cornelia Covington Crawford
Crawfordville Cumming Cuthbert
Dacula Dahlonega Daisy Dallas* Dalton* Danielsville Danville Darien Dawson Dearing Decatur Demorest Dexter Doerun Doraville Douglas Douglasville Dublin* Dry Branch Dudley Duluth

OWNERSHIP OF SYSTEM

SOURCE OF NATURAL

Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal (Warner Robins) Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company Gas Light Company of Columbus Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Municipal (Greensboro-Union
Point) Municipal Atlanta Gas Light Company Municipal

Transcontiaental Transcontinental Transcontinental Southern Southern Southern Southern Southern Southern Southern Southern Southern Transcontinental Southern Southern Southern Transcontinental Southern Southern Transcontinental Transcontinental Transcontinental South Georgia Transcontinental Transcontinental
Transcontinental Transcontinental Transcontinental South Georgia

Municipal (Buford) Atlanta Gas Light Company Municipal Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company

Transcontinental Transcontinental Southern Southern Southern Transcontinental Southern Southern South Georgia Southern Southern Transcontinental Southern South Georgia Southern South Georgia Southern Southern Southern Southern Southern

CITY
Eastman East Point Eatonton* Elberten (Ellaville) Emerson Empire* Eton Euharlee
Fairburn Fairmount Fayetteville Fitzgerald Flemington Flowery Branch Forest Park Forsyth Fort Benning Fort Gaines Fort Oglethorpe Fort Valley* Franklin
Gainesville Garden City Gibson Gillsville Glennville Glenwood Gordon Grantville Gray Grayson Greensboro* Griffin Grovetown Guyton
Haddock (Eatonton) Hagan Hahira Hampton Hapeville Harlem Harrison Hartford Hartley Hartwell Hawkinsville

OWNERSHIP OF SYSTEM

SOURCE OF NATURAL GAS

Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal Municipal Atlanta Gas Light Company Municipal (Cochran) Atlanta Gas Light Company Atlanta Gas Light Company

Southern Southern Southern T ra n sco n tin en ta l South Georgia Southern Southern Southern Southern

Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Gas Light Company of Columbus Municipal Chattanooga Gas Company Municipal Atlanta Gas Light Company

Southern Southern Southern South Georgia Southern T ra n sco n tin en ta l Southern Southern Southern South Georgia East Tennessee Southern T ra n sco n tin en ta l

United Cities Gas Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal (Eatonton) Municipal (Lawrenceville) Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company

Transcontinental Southern Southern Transcontinental Southern Southern Southern Southern Southern Transcontinental Transcontinental Southern Southern Southern

Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal (Cochran) Municipal (Warner Robins) Municipal Municipal

Southern Southern South Georgia Southern Southern Southern Southern Southern Southern Transcontinental Southern

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CITY
Hazlehurst Helena Hephzibah Hinesville Hogansville Holly Springs Hoschton Hull
Ila Irwinton
Jackson Jasper Jefferson Jeffersonville Jesup Jeonsboro
Kennesaw
LaFayette LaGrange Lake City Lavonia Lawrencevilie* (Leesburg) Lexington
Li1burn Lithia Springs Lithonia Loganville Louisville* Ludowici Lula Lumber City Lumpkin Lyons
Mableton Macon Madison Manchester* Marietta Martin Maxeys
Maysville McDonough McIntyre McRae

OWNERSHIP OF SYSTEM
Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company
Atlanta Gas Light Company Dublin Gas System, City of
Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company
Atlanta Gas Light Company
Municipal Municipal Atlanta Gas Light Company Municipal (Toccoa) Municipal Municipal Municipal (Greensboro-Union
Point) Atlanta Gas Light Company Municipal (Austell) Atlanta Gas Light Company Municipal (Lawrenceville) Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company
Municipal (Austell) Atlanta Gas Light Company Municipal Municipal Atlanta Gas Light Company Municipal (Toccoa) Municipal (Greensboro-Union
Point) Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company

SOURCE OF NATURAL GAS
Southern Southern Southern Southern Southern Southern T ra n sco n tin en ta l T ra n sco n tin en ta l
T ra n sco n tin en ta l Southern
Southern T ra n sco n tin en ta l T ra n sco n tin en ta l Southern Southern Southern
Southern
Southern Southern Southern Transcontinental Transcontinental South Georgia
Transcontinental Transcontinental Southern Transcontinental Transcontinental Southern Sou t h e m Transcontinental Southern South Georgia Southern
Southern Southern Transcontinental Southern Southern Transcontinental
Transcontinental Transcontinental Southern Southern Southern

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CITY
Meigs Milledgeville Millen ***#Milner Monroe Montezuma Monticeli* Montrose Morrow Moultrie Mountain Park Mountain View Mount Airy Mount Vernon Mount Zion
Nashville Nelson Newnan Norcross Norwood (Ochlochnee) Ocilla Oconee Odum (Omega)
Palmetto Patterson Payne City Peachtree City Pelham Pembroke Pendergrass Perry Pine Lake Plainsville Pooler Porterdale Port Wentworth Powder Springs
Quitman
Ranger Reidsville Reme rton Rentz Rest Haven (Reynolds) Richland Richmond Hill
****Molena

OWNERSHIP OF SYSTEM
Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company
Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal
Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal (Dalton) Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal (Austell)
Municipal
Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal (Buford) Municipal Municipal Atlanta Gas Light Company
Atlanta Gas Light Company

SOURCE OF NATURAL GAS
South Georgia Southern Southern Southern T ra n sco n tin en ta l South Georgia Southern Southern Southern South Georgia T ra n sco n tin en ta l Southern T ra n sco n tin en ta l Southern Southern
South Georgia T ra n sco n tin en ta l Southern Southern Southern South Georgia South Georgia Southern Southern South Georgia
Sou the rn Southern Southern Transcontinental South Georgia Southern Transcontinental Southern Southern Southern Southern Transcontinental Southern Southern
South Georgia
Southern Southern South Georgia Southern Transcontinental South Georgia South Georgia Sou th e m
Southern

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CITY
Rincon Ringgold Riverdale Roberta Rockmart Rome Roopville Rossville Roswell Royston
Sandersville Savannah Screven Sharon Sheliman Smyrna Snellville Social Circle Soperton Sparta* Springfield Spring Place Stapelton Statesboro* Statham Stilesboro Stockbridge Stone Mountain Sugar Hill Sugar Valley Summerville* Sunnyside Suwanee Swainsboro Sylvania Sylvester
Talbotton Tallapoosa Talmo Taylorsville Temple Tennille Thomaston Thomasville Thomson* Thunderbolt Tifton Tignall Toccoa* Trenton

OWNERSHIP OF SYSTEM
Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal (Fort Valley) Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Companv Chattanooga Gas Company Atlanta Gas Light Company Municipal
Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal
Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company

SOURCE OF NATURAL GAS
Southern Southern Southern Southern Southern Southern Southern East Tennessee Southern Transcontinental
Southern Southern Southern Southern South Georgia Southern Southern Transcontinental Southern Southern Southern Southern Sou the rn Southern Transcontinental Southern Southern Southern Transcontinental Southern Southern Southern Southern Southern Southern South Georgia
Southern Southern Transcontinental Southern Southern Southern Southern South Georgia Southern Southern South Georgia Southern Transcontinental Southern

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CITY
Trion Twin City Tyrone
Unadilla Union City Union Point* Uvalda
Valdosta Vidalia Vienna V illa Rica
Waco Walnut Grove Warner Robin Warrenton Washington Watkinsville Waycross Waynesboro West Point Whitehall Whitesburg Winder W interville Woodbury Woodland Woodstock Woodville Wrens W rightsville

OWNERSHIP OF SYSTEM
Municipal Atlanta Gas Light Company Atlanta Gas Light Company
Municipal Atlanta Gas Light Company Municipal Atlanta Gas Light Company
Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal
Atlanta Gas Light Company Municipal (Lawrenceville) Municipal Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Atlanta Gas Light Company Municipal Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Atlanta Gas Light Company Municipal Atlanta Gas Light Company Municipal Municipal Atlanta Gas Light Company

SOURCE OF NATURAL GAS
Southern Sou them Transcontinental
South Georgia Southern Transcontinental Sou the rn
South Georgia Southern South Georgia Southern
Southern Transcontinental Southern Southern Southern Transcontinental Southern Southern Southern Southern Southern Transcontinental Transcontinental Southern Southern Southern Transcontinental Southern Southern

Zebulon

Atlanta Gas Light Company

Southern

*Municipally-owned systems thus marked served in areas outside the county of which i t is the county s e a t, in which case the Georgia Public Service Commission has ju risd ictio n over rates and other m atters.

The Commission has no ju risd ictio n whatsoever over municipally owned systems where service is rendered wholly within the county of which i t is the county s e a t.

CODE: Southern - Southern Natural Gas Company South Georgia - South Georgia Natural Gas Company Transcontinental - Transcontinental Gas Pipeline Co.
East Tennessee - East Tennessee Natural Gas Company

(B u tler): Parenthesis marks indicate proposed systems in the South Georgia Natural Gas Company network. These c i t i e s w ill be served by Ju ly , 1971.

GAS PIPELINE SAFETY
For the third consecutive year, since the passage of the Natural Gas Act of 1968, the Office of Pipeline Safety (OPS) has accepted the Section 5(a) Certification of the Georgia Public Service Commission for calendar year 1971. During calendar year 1971 the Commission exercised regulatory jurisdiction over the safety standards and practices of all privately-owned gas distribution systems and portions of 28 municipally-owned systems in Georgia.
Two additional personnel, a gas safety engineer and a secretary, were hired during 1971 to devote full time to the gas safety program. The duties of this engineer are to inspect natural gas systems, monitor their safety programs and inspection and maintenance procedures, and to administer the various functions of the Gas Safety Office of the Utilities Division. These duties require personal visits to appropriate locations, both on a periodic basis and as needed in emergencies. A total of 14 separate visits, shown on Figure 1, covering more than 3000 miles were made in order to accomplish the above tasks, including accident investigations.
Five natural gas explosions occurred and were investigated in Georgia in 1971. A summary of these accidents is shown on Figure 2, In each case the gas safety engineer made a personal investigation and submitted a written report to the Commissioners. Three of the five explosions were caused by outside excavation contractors in violation of Georgia Law under House Bill 128 of March 6, 1959.
The payment agreement for federal financial assistance to the gas safety program was renewed in 1971 when the Commission5s applica tion for a grant-in-aid was approved on June 28, 1971, by OPS. This agreement provides for the reimbursement of $12,090 in federal funds for the promotion of the gas safety program in Georgia. This amount represents one half of the total expenditures for gas safety by the Commission in 1971 and will be paid upon completion of vouchers now in work. The grant-in-aid allotment for this state is expected to increase substantially for the coming year.
The gas safety office has served as an effective interface between OPS and the intrastate gas operators in Georgia, both privately-owned and municipally-owned. At present, of the 90 municipally-owned operations, 20 of these have portions of their systems which are under safety jurisdiction of the Commission. As a service to OPS, the gas safety office provided OPS with an updated list of all municipally-owned gas systems in Georgia, including mailing addresses and names of superintendents, in order to insure receipt of OPS safety regulations and literature by the municipalities.

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FIGURE I SUMMARY OF INVESTIGATIONS IN 1971

Date 1/26/71 5/7/71 5/19/71 5/12-13/71 5/25/71 6/7/71 6/15-16/71 6/22-23/71 6/29/71 7/12/71 9/10/71 10/6/71 11/23/71 12/14/71

Location Atlanta, Ga. Atlanta, Ga. Gainesville, Ga.

Company Atlanta Gas Light Atlanta Gas Light United Cities Gas

Columbus, Ga Macon, Ga.

Gas Light Co. of Columbus
Atlanta Gas Light

Roberta, Ga. Savannah, Ga

City of Fort Valley At lane a v.?as Lignt.

Augusta, Ga.

Atlanta Gas Light

Rome, Ga.

Atlanta Gas Light

Doravi lie, G.a.

Atlanta Gas Light

Chattanooga, Tenn . Chattanooga Gas Co.

Gainesville, Ga. United Cities Gas

Columbus, Ga * Austell, Ga.

Gas Light Co. of Columbus
Austell Gas System

Type of Purpose of Inspection Investigation

Visual

Accident

Visual

Accident

Field & Records

Routine

Field 6c Records

Routine

Visual 6c Accident Records

Visual

Accident

Field 6c Records

Routine

Field 6c Records

Routine

Field 6c Records

Routine

Visual

Accident

Visual

Routine

Field 6e Records

Routine

Field 6c Records

Routine

Field

Routine

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Date 1/25/71 5/7/71 5/12/71 5/20/71 6/27/71

Location A tlanta, Ga. A tlanta, Ga. Roberta, Ga. Macon, Ga, D oraville, Ga.

FIGURE 2 SUMMARY OF ACCIDENTS IN 1971

Iniuries 6 0 1 0 0

Fatalities 0 0 0 0 0

Property Damage

Cause

$5931

Non-Standard Service Installation

8100

Outside Contractor

2435

Outside Contractor

3050

Outside Contractor

2300

Leak in P la s tic Insert

Company
Atlanta Gas Light
Atlanta Gas Light
City of F t. Valley
Atlanta Gas Light
Atlanta Gas Light

In support of the inspection activities of the safety engineer, the following equipment was purchased in 1971:
1. One Fisher M-Scope Pipe Locator 2. One Johnson-Williams Odorometer 3. Two Johnson-Williams Gas Indicators 4. One Pipeline Inspection Holiday Detector 5. One Sheppard Pipe/Soil Potentiometer
In 1971 the Chief Utilities Engineer of the Commission partici pated in the annual Gas Association Convention of the Georgia Municipal Association for the purpose of acquainting municipal officials with the Minimum Federal Safety Standards. The presentation was both well-attended and well-received, and the GMA was very appreciative of the Commission's effort on their behalf.

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December 30, 1971
Certificate of the Georgia Public Service Commission submitted to the Secretary of Transportation under Section 5(a) of the Natural Gas Pipeline Safety Act of 1968.
Pursuant to Section 5 (a) of the Natural Gas Pipeline Safety Act of 1968 (49 U. S. C. 1671) (hereinafter referred to as "the Act") the Georgia Public Service Commission hereby certifies to the Secretary of Transportation that~-
1. Except as set forth in Attachment A, under the Constitution and laws of the State of Georgia it has regulatory jurisdiction over the safety standards and practices of all pipeline facilities and the transpor tation of gas (not subject to the jurisdiction of the Federal Power Commission under the Natural Gas Act) within the State of Georgia. The terms "pipeline facilities" and "transportation of gas" are used in this certificate as defined in the Act.
2. It has adopted each Federal Safety Standard established under the Act as of the date of this certification that is applicable to the pipe line facilities and transportation of gas under its jurisdiction as set forth in paragraph 1.
3. It is enforcing each standard referred to in paragraph 2.
4. It has authority to require each person who engages in the trans portation of gas or who owns or operates pipeline facilities subject to its jurisdiction as set forth in paragraph 1, to establish and main tain records, to make reports, and to provide information, and that this authority is substantially the same as the authority provided in Section 12 of the Act.
5. It has authority to require each person who engages in the transpor tation of gas or who owns or operates pipeline facilities, subject to its jurisdiction as set forth in paragraph 1, to file with it for approval a plan for inspection and maintenance substantially as des cribed in Section 11 of the Act.
6. The laws of the State of Georgia provide for the enforcement of the safety standards referred to in paragraph 2 by injunctive and monetary sanctions substantially the same as section 9 and 10 of the Act. In witness whereof, the hand and seal of the Georgia Public Service Commission is hereby affixed on November 3, 1971.
Georgia Public Service Commission
BY Ben T. Wiggins, Chairman

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COMMISSIONERS
BEN T. W IG G IN S . CHAIRMAN W ILLIAM H. K IM B R O U G H , v i c e c h a i r m a n ROBERT C. IBO BBY I PAFFO RD CRAWFORD L. P ILC H E R FORD B. S PIN K S

`Public ^criticc (Jummiusitm
2 44 WASHINGTON STREET, S.W.
At l a n t a ,G e o r g ia 3 0 3 3 4

A. O. RA N D A LL, SECRETARY

May 26, 19T1

GEORGIA - FULTON COUNTY

)

)

GEORGIA PUBLIC SERVICE COMMISSION )

vs .

)

GEORGIA POWER COMPANY

)

SAVANNAH ELECTRIC AND POWER COMPANY )

ATLANTA GAS LIGHT COMPANY

)

GAS LIGHT COMPANY OF COLUMBUS

)

UNITED CITIES GAS COMPANY

)

)

)

Docket No . 2200-U
F i l e No. 1931^ F ile No. 1938U
F ile No. 19367
F i l e No. 19^62'
F ile No. 19392

BY THE COMMISSION:

The Georgia Public Service Commission, on January 15 1971? upon its own motion, issued an Order of Rule Nisi in the above style, ordering that all natural gas distribution companies and electric power companies answer on February 10, 1971, as to why the Commission should not prescribe a higher rate of interest on all consumers' deposits held by the gas and electric utilities operating within the State of Georgia. For good and sufficient cause, the subject docket was first re-scheduled for hearing on March 10, 197-1, and subsequently re-set for March 2k, 1971, at which time it came on to be heard. All cited parties appeared at the
hearing.

The Commission first prescribed a standardized rate of interest
on electric and gas consumers' deposits on December 16 , 1937, m Docket No. 160U-A. The evidence recorded in that case showed that considerable
variance existed among the utilities as to the requirement of an ini-tial
service deposit and as to the rate of interest paid thereon. ^Subsequen Jr*
that original order in Docket 160U-A was reviewed by the Commission, with

orders issued on the 25th of April, 1956, under the original docket

number, and again on October 2h, 1966, in Docket No. 201 -

0 ^

1956 and the 1966 orders prescribed that there should be no chang X

L-l/21 rate of interest paid on consTimers * de.posi.tc as establishe m e

1937 order of the Commission.

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Docket No. 2200-U

2

The Atlanta Gas Light Company, hereinafter referred to as Atlanta Gas, submitted evidence in support of its position that the in
terest rate should not be higher than the presently prescribed U-l/2$^
per annum. As of January 31, 1971, Atlanta Gas held customers' deposits in the amount of $h,288,997. An increase in the rate by 1-1/2$ would
therefore increase the Company's interest expense by $6U,335 annually.
Although Atlanta Gas presently holds deposits from approximately 30$ of its customers, it is now Company policy to require a deposit from all new residential customers. These deposits are then held, along with accrued interest, until such time as the service is discontinued. The deposit is then credited to the customer's account and any excess refunded. Atlanta Gas further supports its position in this matter with the statement that the present h-l/2% rate is equal to the maximum interest rate that national banks are allowed to pay on regular savingsbook accounts and, further, that there is now emerging a definite down trend in interest rates which all savings institutions are willing to pay.
The Gas Light Company of Columbus, hereinafter referred to as Columbus Gas, also appeared in opposition to the proposed interest rate increase. Testimony introduced by Columbus Gas shows that an average amount of $237,000 is presently held in the customer deposit account. For the fiscal year ended August 31, 1970, the total amount of final bills charged off as uncollectible was $37*216. Against this charge-off, Columbus Gas applied customer deposits and accumulated
interest in the amount of $1 6 ,320, thereby reducing the net charge-off
to $20,861. An additional $73,339 in deposits and interest was applied in payment of final bills where no losses occurred, for a total of almost
$90,000 in deposits and accumulated interest applied to customers' ac
counts during the year. According to Company witnesses, Columbus Gas requires deposits only from customers who fall into the transient cate gory, or from customers who have a previous history of delinquent accounts. Normally, a customer who owns his own home is considered a good credit risk and is not required to place a deposit for service . Customer de posit accounts are reviewed annually, and, in those instances where a customer has a satisfactory payment record for a period of approximately
36 months, the deposit with accrued interest is automatically refunded.
It should be noted here that the above-described procedures of Columbus Gas apply to residential accounts. As a general rule, all commercial accounts are required to place a deposit with the Company, and the de posit is then held at interest as long as the account is active.
Testimony submitted by United Cities Gas Company shows that $75,000 is presently held in customer deposits by the Company. At the present time, United Cities has no policy requiring that every customer place a deposit with the Company. According -bo testimony by Company witnesses, each applicant is considered individually, and the local manager is gi dts n . n as to utiether a deposit is to be required.
According to testimony of Company witnesses, the Savannah Electric and Power Company generally requires a deposit from all new applicants for electric service unless the applicant is able to furnish



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Docket No. 2200-U

3.

a satisfactory credit reference or unless the applicant owns his own home. At the present time, there is approximately $298,670 in the cus tomer deposit account of Savannah Electric, which amount represents de posits from approximately 35 percent of the customers served. It is Company practice to refund the deposit and accrued interest automatically at the end of two years, provided that the customer has built a satis
factory payment record.
The Georgia Power Company takes the position that not only is
the present U-l/2 percent rate reasonable but that, further, an increase
in the rate would not be in the public interest. Georgia Power supports the position of other respondents in the premise that the rate of interest paid on customers * deposits should relate in some way to the interest rates paid by banks or other savings institutions on their passbook ac counts . Further evidence was presented by Georgia Power to the effect that the average interest rate currently paid on savings deposits oy Georgia banks ranges from 3-1/2 to U percent. It is further contended that the cost to the Company of the customer deposit account exceeds the
i*-1/2 percent interest rate due to the expenses of collecting, adminis
tering, refunding, and accounting for the customers' deposits. Although no study has been made to support the contention, Georgia Power Company^
speculates that a cost of from 1-1/2% to 2% of the total customer deposits
on hand is a realistic estimate of such expenses. At the present time,
Georgia Power Company holds deposits from approximately k5% of its cus
tomers . Recently, however, the Georgia Power Company has instituted a general policy which requires that all applicants place a deposit at the time of application for electric service. Interest payments to a cus tomer are made upon request once each year. As a general rule, however, customers' deposits plus accrued interest are held by the Company until such time as service is discontinued. The final bill is then credited with the deposit plus interest and any excess refunded to the customer. It is contended by Georgia Power that its present policy permits a more lenient collection policy, allowing the Company to continue a customer s service without interruption until the second bill has been received by the customer. It is contended that an increase in the interest rate at this time could conceivably result in the adoption by the Georgia Power Company of more restrictive collection procedures, such as discontinuing service on delinquent accounts more promptly than is now the practice. The average amount of deposit per customer is approximately twenty-two
dollars ($ 2 2 ) . The total amount of customers1 deposits held by the Georgi Power Company as of March 23, 1971, was $ 9 , 9 3 9 , 3 3 2 .
In the opinion of this Commission it is in the public inter est for each utility company to fairly and indiscriminately administer a reasonable deposit policy that will permit an applicant for service to establish or re-establish credit with the utility for the use of its service. The public interest is thereby protected by the fact that a properly administered deposit policy avoids, to the extent practicable, the creation of a burden arising from uncollectible bills which would have to be borne intimately by all the utilities rate-payers through higher rates. An essential ingredient in administration of a proper deposit policy is its equitability and indiscriminate application to all

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Docket N o . 2200-U

U.

consumers throughout the service area without regard to the economic^ character of a particular local area. The collective credit reputation of any particular area should not reflect upon an individual consumer s credit per s e .
In view of the fact that numerous complaints and charges have been made to the Commission alleging the use by utility companies of the customer deposit account as a source of low-interest capital funds, the Commission's position on this point should herein be made clear. It is obvious that idle funds in the hands of a utility company on^ which it must pay interest cannot be construed as having any benefit to the consumer public. While intentional accumulation by a utility company of large sums in the customer deposit account, without regard to the original purpose for which this account is provided, would indeed constitute misuse of such funds, the use of those funds made available in the normal course of business is, and has been for many years, treated by regulatory agencies as consistent with the public interest and with prudent utility management. Additionally, a blanket customer depooit policy is not intended as a substitute for the responsibility of a utility's management to protect itself diligently against unnecessary loss or to relax its efforts to collect all funds due on delinquent ac counts . There is at present no evidence before this Commission of any such violations by the utility companies involved in this proceeding.
Upon consideration of all the testimony and evidence submitted in this proceeding, it is the opinion of this Commission that certain changes and modifications in the current practices of utility companies as relate to customer deposit accounts are now warranted, and this order shall so provide.
Wherefore, it is
ORDERED: that the rate of interest to be paid on deposits for utility service by applicants or customers of all electric and gas utility companies operating within the State of Georgia shall be at an annual
simple interest rate of five percent (5%). Upon receipt of a cash deposit,
the utility company shall furnish to the applicant for service or customer
a receipt showing: (l) the date of deposit; (2 ) the name of the applicant
or customer and the address of the premise to be served; (3) the type of
service to be furnished; (^0 the amount of the deposit and the rate of
interest to be paid thereon. Customers shall be entitled, upon applica tion to the utility company, to receive payment for the interest accrued on their deposits at any time but not more frequently than once each year.
ORDERED FURTHER: that upon discontinuance of service, the utility shall promptly and automatically refund the customers' deposits plus accrued interest or the balance, if any, in excess of the unpaid bills for service furnished by the utility.

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ORDERED FURTHER: that any customer who has received utility
service at the same location for twenty-four (2^-) consecutive months
without having had service discontinued for non-payment of a hill and who has paid his monthly utility hills promptly and regularly, and if
that customer is not at the end of such 2U-month period delinquent in
the payment of his hills, the utility company shall, within thirty (30)
days of the end of the 2U-month period, automatically refund the deposit
plus accrued interest. If a customer has had service discontinued for non-payment of his hill within a consecutive twenty-four-month period, the utility shall thereafter review the account every twelve hillings
and, at the completion of a total period of twenty-four (2H) months
during which there has heen no discontinuance of service for non-payment and during which a record of prompt and regular payment has heen estab lished, the utility shall automatically refund the deposit plus accrued interest, provided that the customer is not then delinquent in the payment of his utility hills. At the option of the utility, a deposit plus ac crued interest may he refunded, in whole or in part, at any time earlier than the times hereinabove prescribed.
ORDERED FURTHER: that the provisions contained in this order shall become effective on and after July 1, 1971* Georgia Power Company, Savannah Electric and Power Company, Atlanta Gas Light Company, Gas Light Company of Columbus, and United Cities Gas Company shall file revised tariffs with this Commission not later than June 30, 1971 * reflecting ap propriate changes in their customer deposit policies to conform with this order.
ORDERED FURTHER: that jurisdiction over this matter is expressly retained for the purpose of entering such further order or orders as to this Commission may seem meet and proper.
BY ORDER OF THE GEORGIA PUBLIC SERVICE COMMISSION, this the
26th day of May, 1971*

A. 0. RANDALL, SECRETARY

BEN T. WIGGINS, CHAIRMAN

2 4 4 W ASH IN G TO N STR EET, S .W.
At l a n t a ,G e o r g ia 3 0 3 3 4

A.O. RANDALL, SECRETARY

August 4, 1971

GEORGIA - FULTON COUNTY

)

)

GEORGIA PUBLIC SERVICE COMMISSION

)

vs.

)

GEORGIA POWER COMPANY

)

SAVANNAH ELECTRIC AND POWER COMPANY )

ATLANTA GAS LIGHT COMPANY

)

GAS LIGHT COMPANY OF COLUMBUS

)

UNITED CITIES GAS COMPANY

)

)

.)

Docket No. 2200-U File No. 19314 File No. 19384 File No. 19367 File No. 19462 File No. 19392

FIRST AMENDATORY ORDER

BY THE COMMISSION:

Upon its own motion on January 15, 1971, the Georgia Public Service Commission issued a Rule Nisi in the above-styled case ordering all natural gas distribution companies and electric power companies to show cause as to why the Commission should not prescribe a higher rate of interest on all customers* deposits held by gas and electric utilities operating within the State of Georgia. The subject docket was heard on March 24, 1971, and all cited parties appeared at the hearing.

After considering the evidence and testimony submitted in the proceeding, the Commission issued an Order on May 26, 1971, providing that:

1.

'The rate of interest to be paid on deposits for utility

service by applicants or customers of all electric and gas utility companies

operating within the State of Georgia shall be at an annual simple interest rate of 5%. Upon receipt of a cash deposit, the utility company shall furnish to the applicant for service, or customer, a receipt showing

the date of deposit, the name of the applicant or customer, and the address

of the premise to be served, the type of service to be furnished, the

amount of the deposit, and the rate of interest to be paid thereon. Customers shall be entitled, upon application to the utility company, to

receive payment for the interest accrued on their deposits at any time,

but not more frequently than once each year.

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Docket No. 2200-U

2.

"Upon the discontinuance of service, the utility shall

promptly and automatically refund the customers' deposits plus accrued

interest on the balance, if any, in excess of the unpaid bills for

service furnished by the utility."

3.

"Any customer who has received utility service at the same

location for 24 consecutive months without having had service discontinue

for nonpayment of a bill and who has paid his monthly utility bills promptly and regularly, and if that customer is not, at the end ot such

24-month period, delinquent in the payment of his bills, the utility

company shall, within 30 days of the end of the 24-month period, auto

matically refund the deposit plus accrued interest. If a customer has

had service discontinued for nonpayment of his bill within a consecutive
24-month period, the utility shall thereafter review the account e^ery
12 billings, and at the completion of a total period of 24 months during

which there has been no discontinuance of service for nonpayment an during which a record of prompt and regular payment has been established, the utility shall automatically refund the deposit plus accrued interest,

provided that the customer is not then delinquent in the payment 1S utility bills. At the option of the utility, a deposit plus accrued interest may be refunded, in whole or in part, at any time earlier than

the times hereinabove prescribed."

4.

"The provisions contained in the Order shall become

effective on and after July 1, 1971. Georgia Power Company, Savannah

Electric and Power Company, Atlanta Gas Light Company, Gas Light Company

of Columbus, and United Cities Gas Company shall file revised tariffs^

with this Commission not later than June 30, 1971, reflecting appropria e

changes in their customer deposit policies to conform with the Order.

5.

"Jurisdiction over the matter is expressly retained for

the purpose of entering such further order or orders as to this Commission

may seem just and proper."

Atlanta Gas Light Company and Georgia Power Company filed petitions for rehearing, reconsideration, and oral argument with respect to certain aspects of the Commission's Order, and, on June 29, 1971, the Commission granted the petitions and scheduled a rehearing and oral argu ment on July 19, 1971. At the direction of the Commission, the rehearing and oral argument were limited to the problems concerned with refunding
customer deposits.

At the rehearing on July 19, 1971, Atlanta Gas Light Company submitted evidence showing that, although it agreed with the substantive provisions of the Commission's Order dated May 26, 1971, there were various mechanical and procedural problems related with the implementation of this Order. The evidence revealed that because of internal accounting procedures, it was impossible for Atlanta Gas Light to implement the automatic refund feature of the Order earlier than January 1, 1972. Further, Atlanta Gas Light Company requested that it be permitted to make automatic refunds to customers on the anniversary date of their deposits during 1972. The witness for Atlanta Gas also testified that its present

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Docket No. 2200-U

3.

policy was to pay interest on deposits only when held for six months or longer. Atlanta Gas has approximately 50,000 space heating only customers from whom deposits are required, and the great majority of these accounts are active less than six months per year. Such customers ordinarily discontinue service each spring and the deposit is routinely applied to their bills. The Gas Company's position is that the interest payment that would be payable for the six months would be minimal and that it is not appropriate to pay interest on these deposits in view of the Pro" portionately greater administrative and servicing expenses incurred for these short-term customers. The witness for Atlanta Gas Light further testified that because of internal procedures previously mentioned it would be best if the computation of the interest paid on customer deposits be dated from the first day of each month, and that the Company not be required to state the amount of interest paid on deposits to the customer because customer accounting records do not include sufficient space to insert the interest rate on the customer's first service bill. This bill
normally serves as the deposit receipt.

Georgia Power Company submitted evidence in support of its position that the rate of interest paid on customers' deposits should not be stated on the deposit receipt given to the customer, and that Georgia Power was unable to thereby comply with that portion of the Commission's Order requiring deposit refunds on July 1, 1971, to resi dential customers having a 24-month history of regular and prompt payments. Testimony introduced by Georgia Power showed that stating the interest rate paid on customer deposits could create future problems if such interest rate was lowered, and that stating the interest rate would require dis carding of deposit receipt forms presently on hand at a cost of about $5,000.00. Testimony further showed that the Commission's Order requir ing refund to those customers having a 24-month history of regular and prompt payments could not be complied with because the necessary 24-month history would not be available until January 1, 1972, no matter what method the utility utilized. Georgia Power Company's witness agreed with the Commission that a 24-month history of customer payment records was a minimum period upon which refund determinations should be made. Testimony was also adduced as to the method and procedure by which Georgia Power proposed to implement the automatic refund of customer deposits.

The Gas Light Company of Columbus appeared at the hearing and requested the Commission to modify its Order so as to expressly state that the refund provision applied only to residential customers, and not to industrial and commercial customers.

Upon consideration of the evidence and arguments of counsel, this Commission concludes that there are considerable variations in the customer accounting procedures followed by each utility. This is due not only to the peculiarities of each company's operation, but also to his torical factors and the size of the utility's operations. It would be extremely difficult for this Commission to formulate precise mechanical procedures for each utility to follow in effectuating the substantive pro visions of the Commission's Order dated May 26, 1971. Even if such a uniform provision were possible, the procedure would require sizable

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4. Docket No. 2200-U

expenditures by many of the utilities without a corresponding benefit

to the public. Further, the Commission finds it economically impractical

and physically impossible for the petitioners to implement the refund of

customer aepusius

- semuoi.jr

- - *For these reasons, the j _j

Commission finds it to be in the public interest to modify 1 s

May 26, 1971, to provide for an implementation of its substantive p

visions effective January 1, 1972, and requiring each utility to file within 60 days of this Order for Commission approval proposed revision to its rules and regulations for implementing said substantive provisions.

This Order shall, therefore so provide, and shall also restate t e su stantive provisions of the Order of May 26, 1971, and thus superse e an

replace that prior Order.

Wherefore, it is
ORDERED: That the rate of interest to be paid on deposits^for utility service held six months or longer by applicants or customers of all electric and gas utility companies operating within the State of Georgia shall be at a simple interest rate of 5% per annum effective July 1, 1971.
ORDERED FURTHER: That upon discontinuance of service, each utility shall promptly and automatically refund the customers deposits, plus accrued interest on the balance, if any, in excess o t e unpai bills for service furnished by the utility.

ORDERED FURTHER: That any residential customer who has re ceived utility service at the same location for 24 consecutive months with out having had service discontinued for nonpayment of a bill, and who has paid his monthly utility bills promptly and regularly, and if that customer is not, at the end of such 24-month period, delinquent m the payment of his bills, the utilitycompany shall within 30 days of the end of t e 24-month period automatically refund the deposit plus accrued interest.
Provided, however, that the term "promptly and regularly shall not he
construed to disallow the refund to a customer who has had only two de linquent bills during the 24-month period. If a customer!has 1 discontinued for nonpayment of his bill, or has not paid his bill p P y and regularly, the utility shall withhold the refund but thereafter re
view the customer's account every 12 billings, and at the completion of
24 months during which there has been no discontinuance of service for nonpayment and during which a record of prompt and regular payments has been established, the utility shall automatically refund thedeposit plus accrued interest, provided the customer is not then delinquent in t e payment of his utility bills. At the option of the utility, a deposit plus accrued interest may be refunded in whole or in part, at any time earlier than the times hereinabove prescribed, and based on any credit review period less than 24 months in the discretion of the utility.

ORDERED FURTHER: This automatic refund policy shall be placed in effect by"each utility no later than January 1, 1972, and refunds to entitled residential customers shall be accomplished during the anniversary month of the customers' deposits during 1972.

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5.

ORDERED FURTHER: Each utility shall file within 60 days for Commission approval, proposed revisions to its Rules and Regulations for methods and procedures implementing the substantive provisions of this Order.

ORDERED FURTHER: That jurisdiction of this matter is expressly retained for the purpose of entering such further order or orders as this Commission may deem just and proper.

BY ORDER OF THE PUBLIC SERVICE COMMISSION, this 4th day of August, 1971.

A. 0. RANDALL, SECRETARY

BEN T. WIGGINS, CHAIRMAN

WESTERN UNION
In April of 1971 the Western Union Telegraph Company acquired the Teletypewriter Exchange (TWX) Service from the Bell System and independent telephone companies. The acquisition of the TWX Network was the culmination of many years of negotiations between the two
companies and will produce approximately $80,000,000 in additional
revenues and wi-1 increase Western Union Telegraph Company's
subscriber terminals by approximately U0 ,000.
Record Telex revenue and subscriber terminals were the result of a vigorous and comprehensive sales campaign in 1971 during which we increased our Telex terminals by approximately 2,700.
Expansion of Western Union Mailgram service resulted in an
increase from a level of 1 ,000,000 messages a year in 1970 to more
than five times that level by year end 1971*
Substantial progress in reducing the costs of Western Union's public message network, with the conversion of more than one-third of Western Union-operated public offices to agency operation; the continued shrinkage of the old reperforator network; and a net
reduction of more than 17% in the overall employment level were
accomplished despite a general strike which occurred during the period June 1 - July 28.
In 1971 Western Union's teleprinter exchange services (Telex, TWX, etc.) produced more revenue than the traditional telegram business for the first time in the Company's history.
The Georgia Public Service Commission granted a general intra state rate increase on public messages and money order fees.
With the continuing economic growth, and in light of our accelerating progress in many areas, some of which are mentioned above, Western Union is looking forward to a rewarding performance
in 1972.
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