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1ST. *• B* Hulsiaert Los M p l e s ; March 7* 1950 80-5 (oc - Mr. A. 1. Stoddard / W M . R. MAR 8 1950 7 Mr. B* M. Sutton / Mr. «m* Belnhar&t'' Mr. Y. W. Books# Mr. S. A. Wok# Mr. SU L. Bcrtolaeci) Fisas# refer to your lsttsr to as of March 2, 1950, roar file 2703.1, relating to Water Department of LYLfcWCo. The mailgram from Mr. P. 7. lynch of February 24, 1950 at­tacks* to your latter will be sailed to Mr* wsbe*s attention so tbat tba Information therein contained can be considered In making an estimate of future operating expenses for tbs LYIAWGo. Tou asked if we sxpset to give any weight to the state­ment s n&lefc have been prepared by your ojgioe showing estimates of coat of rsproduetion nsw and eost olAx|^'c^ir^H£n leas de- prselation of tbs property used la auppS^^tfeifnervlse to the public at las Yagas. Our present view is nav-aft should submit both historical and reproduction ® ¥ t $ o fatfep-tes to tbe Ooaaissioa et the time of siy heari |f| * Ted rate increases are justified. The estin re prepared On March 1st Mr. tabs, Mr. ftanwiek and X at a preliminary conference with Mr. X. O. Allard, Chairman of the Nevada Public Service Commission, discussed various aspects of our proposed request far increased rates. At that conference Mr. Allard made the statement that tbs Commission would undoubtedly give no weight to the eost of reproducing the properties in arriving at a rate base. Be even went so far as to Indicate that he felt that the historical eost of land rather than Its present market value was the proper amount to use in the rate base* X hope that we will be able to persuade him differently. Because of the attitude of the Commission, X think that It is fortunate that our historical eost figures are as high as they are and X think we will have to rely primarily on the re­sults cfeioh esa be obtained by the use of historical cost figure) for plant plus present market value of land. on both of these bases will be reli rate base which we will suggest to i t * * « * 2 ^ 5 W. W. j WAR 8 1950 MAR 8 '>950 L . C , C . S. Bennett