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Los Angeles, March 14, 1951 AIR MAIL 1-7334 Mr. A. E. Stoddard: (2) (GC - Mr. E. E. Mr. W. H. Bennett / Johnson) At the coming hearing before the Nevada Public Service Commission at Las Vegas, in connection with our application for increase in rates, we anticipate that subdividers engaged in construction of housing projects will oppose our proposed new Rule 9 covering Installation of water mains to serve new develop­ments at Las Vegas, Nevada, which provides: "9. New Extensions - Whenever an application for water is received which will require the Company to extend its water mains more than 50 feet, exclusive of the service pipe of each customer to be served, the applicant shall enter into a contract to advance suf­ficient money to cover the cost of making such ex­tension. The amount advanced shall be refunded quarter­ly to the applicant advancing the same at the rate of 35# of the revenue received by the Company from custom­ers whose service lines connect with such extension for a period of ten years' from date of completion of such extension, or until the full amount of the advance has been refunded, whichever occurs first." Under this proposed rule, and likewise under existing Rule 9-A, if several applicants request an extension and the extension is less than 50 feet per consumer, the Water Company would be obligated to construct the extension without cost to the consumer. However, in case of a housing project where the developer proposes to erect a number of houses for sale or rent, the subdivider would be required to advance the cost of the mains subject to refund under conditions similar to that con­tained in our present Rule 9-A, except that we propose to reduce the rate of refund from 50# to 35# of the monthly revenues. Our present Rule 9-A has been subjected to consider­able criticism by subdividers and developers of housing projects as it may take 10 years for the subdivider or developer to recover his cost and, in some cases, he will not obtain full refund. The subdividers contend that in the case of a housing project in which a number of houses are to be immediately con­structed, (most of our new main Installations serve this type of development) the Water Company within a short period of time,