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has denied the setting up of further depreciation on such plant facilities. However, there is this difference - in these instances, the Utility was using the sinking fund basis ©f depre­ciation, thus warranting the use of an undepreciated rate base. The California Commission now has before it the San Biego Gas ease for decision, in which this matter is involved. There was, however, no issue at the hearing - both the Company and the Staff of the Commission left the amortised Defense Capital as part of the rate base - so 1 expect the Decision will so treat this matter. It is my view that we can try leaving the $160,000 item in the rate base- les ened by the normal depreciation that would be deducted for property of that age. That is the manner in which it has been treated in the summary statement herein presented. Donations in Aid of Construction: This item, Account 173, under “Unadjusted Credits*, stands on the books as of 12/31/49 in the amount of $20$,14$. All of this amount, however, is not reflected in the Fixed Capital. The initial advance collected from the customer and/or real estate sub-divider, includes the estimated cost of installation, plus 10$ for supervision and overhead. It is understood that said 10$ is not capitalised but is charged to operating expenses. Accordingly, the $20$,14$ represents 110$, and 100$ is roughly $190,000 - the amount that is probably reflected on the books as “investment* in pipe-line facilities. While the facilities which have been installed as a result ©f such advances belong to the Company, never-the-less the question arises - Shall the Company be permitted to earn on capital advanced by the customers? I