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MR. WRIGHT REITERATED ALL HIS PREVIOUS STATEMENTS ABOUT THE <br />COST OF THE PLANT AND CONNECTION CHARGES WITH THE TTY. HE STATED <br />THAT THEY ARE SUBJECTED TO THE SAME INFLATIONARY PROBLEMS EVERYONE <br />ELSE IS. HE STATED THAT ALL IT WOULD TAKE TO MAKE THE DIFFERENCE <br />BETWEEN PROFIT AND LOSS AT THIS TIME WOULD BE A BREAK IN A MAIN. <br />COMMISSIONER SCHMUCKER FOUND IT HARD TO BELIEVE THAT THEY <br />ARE OPERATING AT A LOSS WITH THE RATES THEY ARE CHARGING TO 1,000 <br />CUSTOMERS AND MR, WRIGHT STATED THAT THE FIGURES PRESENTED PROVE IT. <br />CHAIRMAN WODTKE ASKED IF A SYSTEM WAS INSTALLED FOR <br />CORROSION CONTROL, <br />MR, WRIGHT STATED THAT IT WAS, AND THEIR ENGINEERS SAY THAT <br />IT IS WORKING. <br />ADMINISTRATOR .KENNINGS ASKED.MR. MCRLLISTER WHAT, IN HIS <br />OPINION, WOULD TAKE PLACE IN THIS SYSTEM IF ALL OF THE LINES INCLUDING <br />THE DEAD-END LINES WERE PERIODICALLY FLUSHED. <br />MR. MCALLISTER STATED THAT THE WATER LEAVES THE WATER PLANT <br />WITH JUST A TRACE OF IRON IN IT, AND HE BELIEVES THE WATER PICKS UP THE <br />IRON FROM THE GALVANLZED LINES WHICH ARE IN TERRIBLE CONDITION. HE <br />FELT THE FLUSHING IS A WASTE OF A LOT OF WATER. <br />CHAIRMAN WODTKE NEXT QUESTIONED MR. MULLE ABOUT HOW HE <br />FIGURED THE RATE OF RETURN AND ASKED IF HE TOOK INTO CONSIDERATION <br />THE QUALITY OF THE WATER OR THE SERVICE. <br />MR. MULLE STATED THAT HE DID NOT: THAT IS CONSIDERED 'ABOVE <br />THE LINE" AND HIS COST OF CAPITAL AND RATE OF RETURN INVOLVES SOLELY <br />THE RETURN OF CAPITAL TO THE SYSTEM AT THE GENERAL WATERWORKS LEVEL. <br />COMMISSIONER SIEBERT ASKED IF THE EFFICIENCY OF MANAGEMENT IS <br />TAKEN INTO CONSIDERATION, <br />MR`, MULLE STATED THAT IT IS, BUT ONLY AS COMPARED TO COMPANIES <br />THAT HAVE A SIMILAR RATING AS GENERAL WATERWORKS, WHICH IS "A" RATED. <br />COST OF CAPITAL IS BASED ON COMPARABLES AND DOES INCORPORATE QUALITY <br />MANAGEMENT. <br />SEP J 4 1977 <br />23 <br />ma 31 PAGE 52 <br />