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The only instance we can find in which eucfc replaee- m n % vat treated on a retired © I replaced bade la incidental retirement in connection with LAdSi. If.©. 8248 in 1928. The re­tirement indicates a ledger value of 24* redwood pipe line of approximately #3.00 per lin. ft., whereas 24* east Iron line in Slace cost approxiaately #10.00 per foot. Further, under LA&SL .0. 834 in 1923, we replaced 3800 ft. of 16* and 24* redwood lines, and the work order proposed that ooet of excavation and backfilling be charged to expenses. This appears to be incor­rect, as most, if not all, of redwood lines in and around our water producing facilities as well as the transmission lines located on Railroad property were laid above ground. while it Is true operating expense chargee were ex­cessive during the years of heavy replacements, 1 do not believe we would be asking consumers to pay multiple charges as during such years our expenses exceeded revenue due principally to such excessive charges. As it appears an historical cost would be in excess of our recorded investment, X believe it would be to our ad­vantage to use the higher figure, and as it reflects our out-of- pocket expenditures, all of which can be ascertained fro® our records, the question of pyramiding of estimates upon esti­mates would be eliminated. There appear to be other features that should be taken into our consideration, such as: v ? * ? 1. X assume the record investment and reproduction value both include the eoet of pipe lines con­structed in various subdivisions which were ad­vanced by the subdivision subject to refund from revenue derived from sal# of water during the ten year period following completion, and only a por­tion of which has been refunded to date. X t is questionable if the Commission will allow inclusion in the property value of the amount in exoese of our refunds. 2. paring the war period we were permitted to amortise a considerable part of the cost of facilities con­structed to serve War Housing projects, or which were necessary to serve the large increase in popula­tion as result of the war effort. The inclusion in our property value of the amortiled portion of these projects may be questioned. X believe it desirable that this information be de­veloped in order that It may be given due ooneideration in our determination of what increase in rates is necessary to net a reasonable return. Wm. Reinhardt (Signed) WM. REINHARDT