PUBLIC UTILITIES - DEPRECIATION RESERVE AS AN ELEMENT OF FAIR VALUE IN ASCERTAINING RATE BASE

The New Hampshire Public Service Commission valued the property of a water works company at $450,000 and fixed a rate by using this figure as a base. Before allowance for depreciation, the reproduction cost was estimated to be $660,000 and the original cost was $485,000. Both parties agreed that the amount in the utility\u27s depreciation reserve, twenty-one per cent of cost, was a reasonable figure for depreciation, which the commission deducted from the valuation. On appeal by the company, held, while it was proper to deduct depreciation at twenty-one per cent nonetheless reserve for depreciation is an asset which should be added to the depreciation value of the property in determining the rate base. State v. Hampton Water Works Co., (N. H. 1941) 18 A. (2d) 765, motion for rehearing denied 19 A. (2d) 435