Modern Gasworks Practice

PLANNING AND LAYING OUT OF GASWORKS 9 A non-statutory Company sometimes supplies gas within the area of a statutory Company witliout molestation. A non-statutory Company may set up works by permission, in the existing area of a statutory local authority, or if already in possession when a statutory authority proposed to extend its limits, may continue to operate by agreement. Generally, Parliament will respect the rights of a non-statutory Company in such, circumstances, and will not graut the statutory Company the extension of limits unless some such agreement is effected, or unless the non-statutory undertaking were brought out by agreement or arbitration. Under the Public Health Act of 1875, a local authority outside the Metropolis may become gas supplier. It may purchase an existing undertaking by agreement, or it may set up its own works to supply the whole or part of its district. The latter proceeding may or may not leave another concern supplying a portion or portions -of its district. The local authority, in. addition to supplying its own ratepayers, often supplies a much. wider district. The price charged in outlying districts will in many cases be greater than tliat prevailing in the inner district, both in the cases of Companies and local authorities. Purchase may be efiected by obtaining a “ Purchase Clause ” in the Bill when the Company is applying to Parliament, or by the promotion of a special Bill, which. may or may not embody other powers. Parliament does not recognize it as a universal principle that the undertaking should be transferred, and the local authority must bring proof either that there bas been serious mismanagement in the past, or that it is to the interest of the ratepayers and consuniers that they should be the gas authority. The price paid for any such transference may be settled by agreement, fa.iling which a price must be fixed by arbitration. The local authority has similar powers to a Company, but has a greater security when raising its Capital, i.e. th.e financial backing of the rates; but, unless expressly authorized, it cannot supply outside its own area. A local authority may include the whole of a neighbouring district in its area of supply, or both areas may be supplied by a Joint Board. In settling the price paid for transference, the following points are considerod, amongst others:— (1) Amount of maintainable profit, as this is usually the basis on which the concern is bought. (2) Number of years’ purchase. (3) Profit on fittings, usually capitalized by taking three to five years’ purchase. (4) Whether the undertaking is statutory or non-statutory. (5) Allowance for surplus or deficient works. There is no definite rule as to the number of years which. are averaged when •dealing with. the maintainable profit, three or five being common figures. In arriving at the maintainable profit the following considerations vary the amount actually shown as the balance of the Revenue Accounts.