Full Volume 19 - Federal Maritime Commission

FEDERAL MARITIME COMMISSION
DOCKET No 7655
PETITION FOR DECLARATORY ORDER OF MATSON NAVIGATION
COMPANY
ORDER
January 7 1977
Matson Navigation Company Matson a common carrier by water in
interstate commerce subject to the Shipping Act 1916 has petitioned the
Commission for a Declaratory Order pursuant to 46 C F R 502 68 1 The
Petition was noticed in the Federal Register on October 8 1976 and
Replies were received from the Military Sealift Command Department of
the Navy MSC and the Commission s Bureau of Hearing Counsel
Hearing Counsel
Z
The Petition seeks authority for Matson to capitalize the cost of monies
used to acquire a new 071 containership now under construction at
Bath Iron Works Corporation 3 This cost would include net interest paid
on borrowed funds actual interest and income foregone as a result of
using existing company funds foregone interest 4 Matson also requests
the Commission to state that such capitalizedinterest will be recognized
as par t of Matson s vessel investment account in all rate making
proceedings involving the new 071 vessel and future vessels con
structed by Matson In support of this request Matson states that the
maintenance of an Allowance For Funds Used During Construction
account and the inclusion of interest paid on capital investment funds
during construction in a carrier s rate base is consistent with the public
utility rate making practices of the Federal Power Commission and many
state agencies regulating electric gas water and telephone companies
Matson also finds support in certain practices of the Maritime Administra
tion United States Department of Commerce MARAD No information
is provided as to why Matson s 071 project differs from other vessel
l
Petition of Matson Navigation Company for Issuance of a Declaratory Order Authorizing Capitalization of
Funds Used Durina Vessel Construction Petition
2 Matson has submitted a Reply to MSC s Reply a pleadina not permitted under the Commission s Rules of
Practico and Procedure 46C F R 502 74
The first of 27 monthly progress payments was made on Aprill 1976
4 Matson wishes the Commission to defer rulina on whether it should be allowed to capitalize income foregone
on funds derived from deferred federal income taxes
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