upr000162 28

19 Sharp deviations from a normal trend in operating expenses appear in 1940 and 1941 and in each year of the four-year period, 1942-1945. In 1940 and 1941, considerable footage of mains was replaced. Under the betterment system of accounting much of the cost of this work was charged to maintenance of distribution mains. During the war years, numerous main extensions were classified as defense projects. Under government ruling, amortization of these projects was permitted as an operating expense and as shown in Table I such heavy charges dur­ing the years 1942 to 1945 inclusive resulted in reduced earnings, and for the years 1944 and 1945, a substantial loss before income taxes. Taking the past four years, operating expenses for the water distribution system (exclusive of joint facility rents and income taxes) have been, as follows; Operating Expenses (Excl. joint facility rents and income taxes) Year Amount Customers Per Customer 1946 $58,954.66 (Average) 5,798 $10.16 47 65,806.73 6,255 10.52 48 69,058.05 6,950 9.94 49 78,930.27 7,593 10.40 Thus it is seen that while the total expenses have shown a modest increase due to the higher price level and the larger system operated, the cost per customer has remained relatively constant, indicating a high degree of economy in system operations. Among the accounts in the classification prescribed for water utilities by the Public Service Commission of Nevada are the following which are used by the Las Vegas Land and Water Company in reporting its operating expenses to the Commission;