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Mr. Wm. Reinhardt 2. August 7 ? 1952 contract data in these areas with the idea that costs prevailing at these points would be com­parable in the las Vegas area. As a result of the foregoing Mr. Montgom­ery has revised his prices for pipe lines in the distribution system and has submitted new detailed computations to cover. While these revised prices have resulted in a substantial increase, they are still approximately be­low my prices for some sizes of pipe, BuuMF. Montgomery has stated that he wishes to stand on them without further revision. The increase in "Cost New" in the District appraisal, due to the above mentioned price increases, was |Jt&*jQ75, including overhead percentages, which also results in an increase in the District’s "depreciated" costs. The over-all net difference between Rail­road Company’s total and District’s total for the balance of the appraisal was such that I did not consider it advisable to take exception to the District’s pricing method in this portion of the appraisal. II, Revision of Service Life of Pipe and Depreciation Deduction. — Exception was taken by me to the service life of 25 years used by the District on approximately 82% of the cast iron pipe lines in "Distribution System" and a small portion of the production sys­tem. The method used to determine service life of pipe was by use of the "Shepherd’s Earth Resistiv­ity Meter" as previously described in attachment to ray letter of June 25, 1952. This question of the service life of cast iron pipe was again taken up with Mr. Montgomery, and field inspection was made on July 22, 1952', of pipe lines, which were uncovered at several locations in areas where Mr. Montgomery’s forces had determined that soil was highly corrosive, and at points where pipe had been in place for periods ranging from 23 to 25 years. Mr. Montgomery personally inspected these pipes for corrosion or carbonization, using a hammer and chis­el. All of the pipes tested were found to be in