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n » The only instance we can find in ililei seek replnee-seat wee treated @e a retired and replaced basis i« incidental retirement in connection with L M S h ¥.0. © M S In 1828, The re­tirement indicate# a ledger value of 24* redwood pipe line of approximately 13.00 per lie. ft., whereas 24* east iron line la pisee cost approximately 110.00 per foot. Further, under LA&SL ¥.0. 684 in 1820, we replaced 3800 ft. of 16* ©ad 24* redwood lines, and the work order proposed that cost of excavation and backfilling be charged to expenses. This appears to be incor­rect, as moat, if not #11, of redwood lines in and around cur water producing facilities as well as the transmission lines located on Railroad property were laid above ground. cecslve during the years of heavy replacements, 1 do sot believe we would be asking consumers to pay multiple charges a® during such years our expenses exceeded revenue due principally to such excessive charges. 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 from our records, the Question of pyramiding of estimates upon esti­mates would be eliminated. There appear to bo other features that should be taken into our consideration, such as: 1. X assume the record investment and reproduction value both include the coat of pipe lines con­strue ted in various subdivisions which were ad­vanced by the subdivision subject to refund fro® revenue derived from sale of water during the ten year period following completion, and only s por­tion of which has been refunded to date, Xt ie Questionable if the Commission will allow inclusion in the property value of the amount la excess of our refunds. 2. During the war period we were permitted to amortire a considerable part of the cost of facilities con­structed to serve far lousing projects, or which were necessary tc serve the large increase in popula­tion as result of the war effort. The inclusion in our property value of the amortited portion of these projects may be Questioned. X believe it desirable that this information be de­veloped in order that it may be given due consideration in our determination of what increase in rates la necessary to net a reasonable return. While it is true operating expense charges were ex- Ac it appears an historical cost would bo in excess