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discrimination, which should be discontinued if, and as soon as, the company can relieve itself of the obligation of that contract. It also appeared that the company was making a special rate to power customers with installations of 100 horse-power and over. There is no good reason why the company should not include such rates in its published schedules, so that they may be publicly known and open to all who desire to avail themselves of the same.
The company was supplying 173 enclosed arc lamps of nominal 1,200 candle-power and 24 incandescent lamps of 32 candle power, burning on an average of about 26 nights a month and 6 hours a night. Save for some increase in number, the equipment appeared to be the same as when the present management came into control of the company. In response to a request for such service, the company made a price for these arc lights for all night and every night of $95 each on a one-year, $92 on a three-year and $90 on a five-year contract, and the petitioner requested the Board to make a reduction in this price. There was no offer of any change in equipment or service in the consideration of a contract longer than one year, and no reason other than the length of time was shown for a difference in price. While the price at which the company voluntarily offered to furnish these arc lights was not conclusive as against the city that such price was reasonable, it may properly have its effect as against the company. After a careful consideration of the operations and costs as related to both the street arcs and the incandescents, and having in view that no new equipment was offered or required, the Board was of the opinion that the prices hereinafter named were reasonable and fair for all night and every night service for the type and candle-power of the lamps installed, even though a contract for the same be made for one year only.
The Board recommended that on and after Jan. 1, 1911, the net price for gas sold by the Newburyport Gas and Electric Company should not exceed $1.35 a thousand cubic feet, and that the net price charged for electricity should not exceed 14 cents a kilowatt hour, with such minimum monthly charges to its lighting customers as it was employing, but not exceeding
$1 a month; and that the price of electric street lights, burning all night and every night, of the types installed, so long as not less than the number of each type then in use is maintained, should be not more than $90 a year for each lamp and not more than $30 a year for each incandescent lamp. (November 22.)
Consolidations. EDISON OF BOSTON - LEXINGTON CONSOLIDATION. This was the joint application of the Edison Electric Illuminating Company of Boston and the Lexington Gas and Electric Company, under chapter 316 of the Acts of 1909, for the approval by the Board of the purchase by and sale to the former company of the locations and property of the latter used in its business of generating and furnishing electricity for light and power.
After due notice a public hearing was given, as required by law.
Annexed to the application was the agreement of the two companies, together with certified transcripts from their records, by which it appeared that the terms of the purchase and sale in question had been approved, at meetings called for the purpose, by votes of more than two-thirds in interest of each of the contracting parties, adopted within less than four months prior to the filing of said application.
The Lexington Gas Light Company was organized under the general law in 1874 for the purpose of making and selling gas in Lexington, and shortly afterwards actively engaged in the business. In 1893 it was duly authorized by this Board to engage in the business of generating and furnishing electricity for light and power, and within the time prescribed erected and equipped the necessary plant therefor. In 1899 the company became insolvent, and the mortgage given to secure its bonds was foreclosed. The Lexington Gas and Electric Company was organized a few months later, for the purpose of “manufacturing and selling gas for light, heat and fuel, and all other lawful purposes; generating and furnishing electricity for light, heat and power; and also purchasing or leasing such rights and property as may be necessary or convenient therefor.” It acquired all of the property, business rights, franchises and effects
formerly belonging to the Lexington Gas Light Company, and has ever since been engaged in the business of making and selling gas and electricity in Lexington. In 1905 it extended its lines into Bedford. The Edison Company had its lines, and was supplying electricity in the city of Boston and thirty-one other neighboring cities and towns, including Waltham and Arlington, municipalities contiguous to Lexington.
On Jan. 1, 1910, the Lexington company's gas plant had a book value of $16,267.65, and its electric plant, $96,538.34, with outstanding capital stock of $40,000, bonds of $40,000, and notes payable for $24,500.
By the terms of the agreement upon which this application was based, the Lexington company was to sell all of its property and rights of every name, nature and description, except the locations and tangible property used in its business of generating and distributing gas and such real estate as naturally appertains to and is used in said gas business,” and the Edison company was to pay therefor the sum of $87,000 in cash, to assume and pay the outstanding bonds and interest thereon and to pay and discharge all other debts of the Lexington company. By the terms of the contract between the two companies the Edison company was to receive from the Lexington company for the consideration named, in addition to the electric plant, all of its quick assets, the value of which was about $8,500 in excess of the accounts payable. This amount being available toward the cancellation of the bonds and the interest accrued thereon, left, as the net amount of bonds to be otherwise provided for by the Edison company as a part of the purchase price, about $33,000, making the net payment for the property purchased $120,000. The Board had approved an issue of additional capital stock by the Edison company for this purpose. Assuming that the bonds, notes and other debts of the Lexington company were to be paid or discharged prior to or simultaneously with the consummation of this transaction, the aggregate amount of the capital stock and the aggregate amount of the debt of the two companies will not be increased thereby.
It developed at the hearing that about a year before the president of the Edison company, in its behalf, purchased the entire stock of the Lexington company for $72,500, and had since ac
quired all of the $ 24,500 of notes and $35,000 of the bonds outstanding. Two other bonds of the par value of $2,000 were owned by the Lexington company in its bond sinking fund. It also appeared that, as an incident to the sale of the electric property and other assets to the Edison company, the entire stock of the Lexington company had been sold to the interests owning the Arlington Gas Light Company, at a price which returned to the president of the Edison company the entire amount advanced by him for the stock and notes, but no more, thereby enabling him to cancel the $24,500 of the company's notes.
Soon after the purchase of the Lexington company's stock on behalf of the Edison company the lines of the two companies were connected, and the Edison company at the time of the decision was furnishing to the Lexington company the electricity supplied to the latter's customers. At about the same time, by an agreement with the town officials, the Edison company's prices were adopted by the Lexington company, resulting in a considerable reduction both to the town and to private customers.
There can be little doubt of the substantial advantage to consumers of electricity in Lexington and Bedford when this transaction is consummated. There was evidence at the hearing that this advantage was appreciated and desired by the communities in question. On the other hand, the Board was satisfied that there was no disadvantage to the territory supplied by the Edison company if this purchase and sale was approved, and that the facilities for furnishing and distributing light, heat and power would not be diminished thereby.
The present Lexington company and its predecessor had always made and sold oil gas. Since 1899, when it acquired the business, the present company had made a substantial loss in the operation of its gas plant. The kind of gas supplied by this company was reasonably sure to be unsatisfactory to consumers in a town like Lexington. To equip the company suitably for the manufacture and supply of the kind of gas commonly in use throughout the State obviously required a new expenditure which might equal or exceed the existing capital; and it was very doubtful if the volume of business would be sufficient to pay a reasonable return upon so large an investment. If, however, this company could ally itself with
some other and stronger concern in such a way as to avoid the expenditure incident to a new manufacturing plant, purchase its gas at a reasonable price and expend a reasonable amount upon its distribution system, there was reason to believe that a satisfactory return might be obtained upon the investment necessary. Indeed, it was doubtful whether a satisfactory service in the supply of gas could be given this community in any other way. The sale of the electric property and the change of ownership of the company as outlined above offered an opportunity for such an arrangement.
The prospective owners of the gas property assured the Board, on behalf of the corporation, that, after the payment of a dividend in partial liquidation on account of the sale of the electric property, it would retain in its treasury not less than $27,000; that this money would be expended upon the company's distribution system, to enable it to purchase its gas and deliver it, not only to present customers, but more generally in the town; and that, if the amount so reserved should prove insufficient, such further sum as might appear to be necessary would be expended for the purpose.
Upon the considerations stated the Board adopted the following:
In the matter of the joint application of the Edison Electric Illuminating Company of Boston and the Lexington Gas and Electric Company for the approval by the Board of the purchase by and sale to the Edison Electric Illuminating Company of Boston of the locations and property of the Lexington Gas and Electric Company used in its business of generating and furnishing electricity for light and power, as provided in chapter 316 of the Acts of 1909 :
The Board of Gas and Electric Light Commissioners, after notice and a public hearing and upon due consideration thereof, hereby approves said purchase by and sale to said Edison Electric Illuminating Company of Boston upon the terms set forth in said application and in the agreement and duly certified votes of said corporation annexed thereto: provided, however, that prior thereto or simultaneously therewith all of the bonds, notes and debts of said Lexington company shall be extinguished. (April 26.)
Supplementary. Whereas, this Board, on the twenty-sixth day of April current, did approve of the purchase by and sale to the Edison Electric Illuminating Company of Boston of all the locations and property of the