GJWA Historical Documents
The first rate case in which the Johnstown Water Company was involved occurred in 1920. The company announced a rate increase of approximately thirty-three and one third per cent and there innuediately were many protests. (City) Mayor Joseph Cauffiel and the Borough of Ferndale filed complaints and requested a hearing before the Public Service Commission. The city was represented at these hearings by City Solicitor Tillman K. Saylor and the water company by its solicitor, Attorney J. C. Davies. Both sides filed briefs and the commission heard testimony on physical property, revenue, expenses and other matters in a series of hearings that lasted from December l920 until Noveniber 1921. After all testimony and briefs had been examined the Public Service Commission ruled in favor of the plaintiffs, Mayor Cauffiel and Ferndale Borough, and stated that the rate increase was excessive and that it must be brought down to an acceptable level.
Johnstown Water Company was next involved in a rate case in 1926. On September 20, 1926 the company announced rate increases which would affect every consumer to a greater or lesser degree. Minimum quarterly meter rates were raised an average of eleven percent and flat rates went up an average of thirty percent, but the greatest increase was in the yearly rate charged the city for fire hydrant rental. The city had paid $50 for each of 357 hydrants (a total of $17,850); they were now asked to pay $38,000, or over $100 per hydrant. They city, through its solicitor TilIman K. Saylor, and the boroughs of Ferndale, Dale, Lorain, Geistown and Westmont, through their various solicitors, filed protests with the PSC against the proposed increase. The first hearings were held during January of 1927. The city was represented by Attorneys Tilbnan K. Saylor and D. P. Weimer; the water company was represented by Attorney J. C. Davies. During the hearings Nathan Jacobs, an engineer for Morris Knowles, Incorporated, testified that the current value of the water company was $6,963,1014.87. The complaints were withdrawn on November 15, 1927 when the municipalities and the water company reached a private agreement. The water company agreed to reduce the amount charged the city for fire hydrants from $38,000 a year to $31,£50 and to return to the city $32,000 collected for fire hydrants under the old contract which granted the city 614 hydrants and perpetual free service. The old contract had been abrogated by the Public Utility Commission some time previous to the rate inquiry, but under the terms of the agreement reached the city will still receive the refund from the water company. The increased hydrant rates for the boroughs also were reduced, but the flat rate and meter rates were not changed. This agreement between the municipalities and the water company resulted in a complete withdrawal of all claims before the Public Utility Commission.
In 1938 the rates of the Johnstown Water Company were again called into question by the Public Utility Commission. The water company was notified on February 1, 1938 that the PUC, planned to investigate its rates and charges. The hearing was scheduled on December 2, 1938 and the water company was again represented by its solicitor, J. C. Davies. Testimony by Nathan B. Jacobs, consulting engineer, placed the total fined value of the company at $6,900,573.90. After hearing all testimony, the commission declared a continuance to study the documents submitted. However, before the commission reached any decision on the case there was a change in administration in Harrisburg and the Democratic administration of Governor Earle was replaced by the Republican one of Governor James. The public Utility Commission seats are appointive and therefore with a change in parties in power there were several changes in commission mambers. With the advent of the new members, the inquiry into Johnstown Water Company rates was not continned. Finally, on January 31, 1942 the Public Utility Commission stated that "Further prosecution of the inquiry and investigation (into JWCO rates) is not necessary." In 1953, due to the many additions to the physical plant and to the increasing cost of operations, it was necessary for Johnstown Water Company to raise its rates one-third. The proposed increase was the first in a quarter of a century--since 1926. Every service except public fire protection was to be increased in cost. On January 28, 1953 the Public Utility Commission granted the Johnstown Water Company permission to raise the rates. Then on February 25, 1954 the water company announced a twenty percent rate hike to become effective on May 1. City Council decided to contest the increase and sent a letter of protest to the PUC demanding "Clear Proof" of the necessity to increase rates. The PUC, after holding hearings, announced on April 21, 19511 that the twenty percent rate increase would be permitted and therefore indicated that the increase was justified. The hearings on the City Counci1's protest continued after the go-ahead given the water company by the PUC. Johnstown Water Company was represented in these hearings by Attorney Ernest R. von Stark of Philadelphia while City Solicitor Elvin Teitlebaum spoke for the municipality. The hearings began on May 21, 19514 and were adjourned November 16 of that year. On March 20, 1955 the PUC announced its decision to dismiss the City of Johnstown1s complaint and to allow the increase which they found to be "not excessive" to stand. The city did not ask for an appeal. In December of 1956 the Johnstown and Conemaugh & Franklin water companies again proposed to raise rates, this time by approximately twenty-five percent. This increase was not a flat twenty-five percent one however, but was to range from three percent to thirty-three percent depending on the amount of water used and the classification of the user. There was no increase in public fire protection rates. City Council reacted to the proposed increase as they had to others in the past by announcing, on January 16, 1957, that they would protest the rate hike by filing a formal complaint with the PUC. Hearings were opened on March 27, 1957 and during these hearings the proposed increase was suspended. In testimony heard during this case, Victor G. Reis, admiriistrative assistant to B. D. Broeker of Bethlehem, secretary of the Jdrnstown Water Company, testified that the rate increase was necessary if the company was to pull its own weight in the Bethlehem setup. On August 8, 1957 the PUC handed down its decision, permitting the Johnstown Water Company to boost its rates by twenty-five percent. The PUC stated in its decision that it found the fair value of the Johnstown Water Company to be $12,000,000 and that the Conemaugh & Franklin Water Company to be $352,000.
