Nogales International

CITY COMMITTEE NAMED TO SEEK AGREEMENT IN UTILITIES RATE DISPUTE

Mayor Harry J. Karns and City Aldermen Robert S. Burns and C. C. Cheshire were appointed at a recess meeting of the city council Monday night to meet with a committee from the Public Utilities Consolidated Corporation to see what the company has to offer toward a settlement of the utilities controversy.

Appointment of the city committee is a result of a conference held Saturday by city officials and representatives of the power company with Amos A. Betts, chairman, and Charles Howe, of the Arizona Corporation Commission, at the office of the Chamber of Commerce.

The city and power company committees will endeavor to reach some agreement whereby reductions sought by the city can be made effective in part at least pending decision of the superior court of Maricopa county in the case of the Tucson Gas, Electric Light & Power Company against the Arizona Corporation Commission in which the Tucson company seeks to have Nogales rates ordered by the commission declared void. The recommendations of the joint committee will be sent to Receiver Chapman for his consideration.

The city officials in conference Saturday afternoon with the power company and Corporation Commission stated they thought they ought to be given reductions provided for in the last order of the commission which reduced the payments from the Public Utilities to the Tucson company by about $10,000 a year.

That reduction was never made because the Tucson company took it into court in Maricopa county and it has not yet been decided by that court.

The city's reason for believing it ought to get the reduction now is based on the fact that the local company has recently been operating its plant in Nogales and generating its own power. This power, the city maintains, can be generated cheaper than the cost from Tucson.

Mayor Karns stated that the change from purchasing in Tucson to generating its own power was permanent, therefore, the city ought to have this saving now. Inasmuch as the commission's order had been appealed to the court the commission could not make an order requiring the company to make the reduction effective immediately, Chairman Betts said at the morning session of Saturday's conference and added: "We ourselves suggested that a further conference be held last Saturday afternoon to find out definitely whether or not the change in source of power was actually permanent".

The company's representatives in the afternoon stated that the change was not permanent, that the engines had been run for an experimental period of two weeks for the purpose of determining their condition, that the time expired Saturday night and that they are not going to continue it, primarily for the reason they would have to pay the Tucson company for 3,000,000 kilowatt hours of energy whether they take it or not.

Under the Tucson contract, as now exists, the local company has to pay a demand charge and line rental charge and the 3,000,000 kilowatt minimum per year. It was at the suggestion of P. V. Mabry, of the Public Utilities that a committee be appointed by the city to work with the company in an attempt to reach a settlement of the difficulties and that any recommendations made would be sent to Receiver Chapman.