The effect of recent decisions on the work of inventory and appraisal
Proceedings of the American Institute of Electrical Engineers
OF PAPER In order that our inventories and appraisals shall be useful in determining all of the appropriate elements of value, they must be classified as to age, condition, use, and extent of use in each class of service. TOURING the past few years there has been much discussion *-** on the proper basis for rates. This discussion has been quite confusing at times because of the entrance into it of those who were not familiar with all sides of the question. That is, engineers not familiar with
... e existing legal decisions have argued pro and con on the subjects of valuation and deprecia tion, and lawyers not familiar with development cost have based their arguments entirely on the decisions of the Courts. If we are to have proper respect for our Courts, we must abide by their decisions and, if not satisfied, we must familiarize our selves with all of the conditions leading to the Courts' decisions. Probably the earliest cases-which begin the history of decisions concerning valuation are those of the Brunswick and Waterville, Maine, cases. We must bear in mind, however, that those were cases in which negotiations were in progress looking to the sale by water companies of their properties to the municipalities. In those cases the franchise rights had either expired or the municipalities had the right to take over the properties as well as the franchises, and thereafter operate them. In "purchase and sale" cases, clearly the matter to be determined is the value of the property, all things considered, including * 'going, concern" values if any exist. After a study of many of the great rate cases, the writer has come to the conclusion that the confusion of mind has come from the fact that the early decisions were based upon "purchase and sale" cases and did not primarily have anything to do with cost in its broad sense.