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detail the estimated capital additions to the plant of the Water Company for the year 1951 totaling $230,000, the most of which anticipated additions have already been made at this time. As shown in Table VII~b, page 21 of Exhibit B the esti­mated year-end capital at book cost as of December 31, 1951 is $1,065,583, which figure should have been the starting point of any rate base estimate made by the Commission instead of the figure $835,583*00. We have already discussed this problem to some ex­tent in calling attention to this same error in the rate base fixed by the Commission for the Railroad Company. We want to emphasize again the fact that the Commission selected 1951 as a test year to measure the deficiency in the revenues of the Water Company. In estimating expected revenues the Commission accepted figures which were produced by the Water Company and which were based upon all new services which were expected to be made during the year 1951 as a result of the capital expan­sion of its distribution system during the same year. (June Tr. 44,45) The Commission also based its estimates of operat­ing expense upon the year 1951. It'is obvious that the capi­tal base used by the Commission should reflect conditions in the year 1951 and not in the year 1950. It is customary to use the average of the capital at the beginning and that at the end of the test year in arriving at a rate base* If any emphasis is to be given to the amount of capital invested at one time or the other of the test year, the emphasis in this -56-