Public Service Commission, Second District [Vol. 15] 3. A summary by the prescribed accounts showing the expendiures during such period. In reporting under subdivision (f) of this clause there shall be further shown the expenditures of the proceeds of the bonds herein authorized to the beginning of the period reported upon and a total, showing such expenditures to the end of the period. Such reports shall continue to be filed until all of said securities shall have been disposed of and the proceeds used in accordance with the authority contained herein, and if during any period no securities were disposed of or proceeds used, the report shall set forth such fact. 13. That this proceeding is hereby continued upon the records of the Commission until the examination which is to be made of the books, accounts and property of the petitioner herein shall have been concluded and the corrections, if any, which by reason of such examination this Commission shall determine to be proper and necessary shall have been made, accepted by the corporation. and entered in the accounts of said company to the satisfaction of the Commission. 14. That the authority contained in this order to issue and pledge securities is upon the express condition that the petitioner accepts and agrees to comply in good faith with the provisions hereof and before any securities are issued pursuant hereto and within thirty days of the service hereof, the said company shall file with the Commission a satisfactory verified stipulation over the signatures of its president and secretary accepting this order with all its terms and conditions, and such order shall be void and of no force or effect until such stipulation shall have been filed as last above provided. Finally it is determined and stated, that in the opinion of the Commission the money to be procured by the issue of said securities herein authorized is reasonably required for the purposes specified in this order and that such purposes are not in whole or in part reasonably chargeable to operating expenses or to income, except as to the amount of $838,894.40. As to this amount the record in this case shows that the company claims that it is enti [Vol. 15] Public Service Commission, Second District tled to reimburse its treasury for expenditures made out of income and for obligations incurred in acquiring fixed assets and in making extensions, additions and improvements to its property. The Commission has been unable to make the necessary examination of the books of the corporation to ascertain the facts in this regard and for this reason has felt it proper and necessary to state that the amount of proceeds of bonds last mentioned is reasonably chargeable to operating expenses or income. When the necessary examination shall have been completed and the necessary entries on the books of the corporation as required by the Commission shall have been made the petitioner may apply for a modification of this order in respect of the amount of proceeds of said bonds which finally may be determined by this Commission as reasonably and properly chargeable to operating expenses or to income. In the Matter of the Petition of the NIAGARA, LOCKPORT AND ONTARIO POWER COMPANY, under Subdivision 3, Section 61, Transportation Corporations Law, and Section 70, Public Service Commissions Law, for Consent to Merge Salmon River Power Company Case No. 6275 (Public Service Commission, Second District, January 29, 1918) Merger of a power company in a similar company owning all the stock of the company to be merged. The Niagara, Lockport and Ontario Power Company owns and holds all the issued and outstanding capital stock of the Salmon River Power Company, having acquired the said stock under authority of this Commission, and is also the guarantor of certain obligations which have been issued by the other company and now outstanding, and desires to take over and merge the Salmon River Power Company pursuant to the statute with reference thereto. Permission granted with the usual restrictions. Petition filed November 22, 1917. Report of division of capitalization dated January 9, 1918. Public Service Commission, Second District [Vol. 15] BY THE COMMISSION. It appearing from the record in this case that the Niagara, Lockport and Ontario Power Company is the owner and holder of all of the issued and outstanding capital stock of the Salmon River Power Company, and that it has acquired said stock from time to time pursuant to authority granted by this Commission, and that the said Niagara, Lockport and Ontario Power Company is the guarantor of a substantial amount of obligations which have been issued by the Salmon River Power Company and which are now outstanding, and that the said Niagara, Lockport and Ontario Power Company is now desirous of merging the said Salmon River Power Company pursuant to the provisions of the statutes with reference thereto, it is ordered as follows: 1. That the Niagara, Lockport and Ontario Power Company be and it hereby is permitted to merge the Salmon River Power Company. 2. When such merger is effected the assets and liabilities shall be taken over on the books of the Niagara, Lockport and Ontario Power Company at the amounts shown therefor as of December 31, 1916, modified only by the legitimate corporate transactions of said Salmon River Power Company between that date and the actual date of said merger. 3. That the permission and approval of this Commission be and the same hereby is given to the Niagara, Lockport and Ontario Power Company to exercise all the rights, privileges and franchises now held and enjoyed by the Salmon River Power Company. 4. That when said merger is completed each and every certificate representing the shares of stock issued and outstanding and now owned by the Niagara, Lockport and Ontario Power Company shall be canceled and stamped with a legend showing that said Salmon River Power Company has been merged into the Niagara, Lockport and Ontario Power Company and all of its property, rights, privileges and franchises of every name and description have been transferred and taken over by the Niagara, Lockport and Ontario Power Company. [Vol. 15] Public Service Commission, Second District 5. That the Niagara, Lockport and Ontario Power Company shall notify the Commission in writing promptly after such merger has been completed and the legend has been placed upon the stock certificates as hereinbefore provided and shall set forth in such communication the form of such legend or inscription. 6. That the Niagara, Lockport and Ontario Power Company shall, within a reasonable time after the consummation of the merger approved in this order, file with the Commission all such annual or other periodic reports as the Commission may be required by law to obtain or which it is empowered by law to exact and shall require, concerning its operations and financial or corporate transactions during the period subsequent to the date of such report last filed and prior to the effective date for accounting purposes of the merger hereby approved. 7. That the authority contained in this order is upon the express condition that the petitioners accept and agree to comply in good faith with the provisions hereof and within thirty days of the service hereof the said companies shall file with the Commission satisfactory verified stipulations over the signatures of their presidents and secretaries accepting this order with all its terms and conditions, and such order shall be void and of no force or effect until such stipulations shall have been filed as last above provided. 8. Neither the financial condition of the Niagara, Lockport and Ontario Power Company nor its balance sheet has been passed upon or determined by this Commission; and it is expressly provided and understood that this order is not intended and shall not be construed either as approving or certifying the correctness of said balance sheet or as approving or certifying the correctness of any balance sheet which may be claimed by the corporation after the merger, or as a result thereof. Public Service Commission, Second District [Vol. 15] In the Matter of the Petition of the LOCKPORT LIGHT, HEAT AND POWER COMPANY for Permission to Revise its Rates for Electric Lighting and Power Service Case No. 4335 (Public Service Commission, Second District, January 31, 1918) Two electric light and power companies cannot successfully compete in a small city. The merger of two different electric light and power companies cannot be made the basis of a claim by the city that the owners of the property shall not be allowed to earn a fair return upon the value of all their property employed in the public service. No allowance can be made to an electric light and power company for a deficiency of return prior to the time when it acquired the plants and property of several other similar corporations. The owners of the stock of a company which is operating as a public service company are entitled to a return of at least 8 per cent upon their investment. Justification for a service charge. Elements which constitute a fair and reasonable fixed basis of such charge. Regulation of public service corporations has developed the fact that competition and regulation do not go hand in hand but are directly antagonistic to each other, and it has been demonstrated repeatedly that two electric light and power companies whose entire business is confined to a small city cannot successfully compete and earn a fair return upon the capital invested unless they charge excessive rates for the service performed. Where a city grants franchises to two different corporations enabling them to compete for the electric light and power business in the community, and the companies are afterward merged or consolidated, the city cannot successfully urge that the owners of the property which was installed for the benefit of the people of the city shall not be allowed to earn a fair return upon the value of all the property employed in the public service. The fact that there may be a duplication of property is due to the situation which was created by the city when it granted two franchises to two separate corporations, and the owners of the property must be allowed a reasonable opportunity to work out of the difficulty. An electric light and power company which acquires the existing plants and property of two other corporations engaged in a similar |