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_____________________________________________________________________ 37 half of the water hearing acreage are merely normal values for the surface rights for ordinary uses, and do not include any increment in value because of the water bearing character of the land. The Water Utility and the Production Company are willing to include in their claim for water rights, for rate-making purposes, what amounts to not more than a token allowance - thus sharing with their customers and the public the major portion of this water right value without charge. In so doing, however, the companies are not relinquish­ing any of their legal rights that may be attached to such water rights if the properties were to be sold. Rate Base The capital base figures upon which the two companies seek to earn a fair return are set up on the same three bases that were de­veloped for the fixed capital estimates. In the development of the rate base estimates the average fixed capital for the years 1949 and 1950 have been used from which has been deducted the depreciation reserve and/or the reserve require­ment computed on the straight line basis; also deducted is an estimate of that part of the subdivider advances in aid of construction that will be refunded. Working cash and material and supplies have been added. Tables E, P and G, in the Appendix, show the development of the rate base estimates. These may be summarized for-the year 1950, as follows: Production Water Facilities Utility Total Basis (LA&SLRRCo.) Index (LVL&WCo.) Index Estimate Index 1- Investment f 709,500 T.00> $579,700 1.00 $1,289,000 1.00 2- Original Cost 734,700 1.03 .666,800 1.16 1,401,500 1.09 3- Present-Day Cost 1,013,300 1.43 854/900 1.47 1,868,200 1 .4 5 In the development of these rate base figures, only recogniz­ed methods have been employed. These will now be briefly reviewed.