Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-09-04
Radical Changes in Relation
ship Between Utilities in
Immediate Prospect.
PROPOSITIONS SUBMITTED
BY DISTRICT COMMISSION
Washington Railway and Electric
Co. and Potomac Electric Power
Co. to Make Reply.

are in immediate prospect as result
of radical changes affecting the rela-
: tionship between the Washington Rail-
way and Electric Company and Poto-
mac Electric Power Company proposed
today by the public utilities commits
sion of the District.
eliminating months of investigation
of these companies, the commission
this afternoon announced that it is con-
sidering issuing certain proposed or
ders. the effect of which will be to re-
quire the railway company to make
more adequate compensation for the
power which it purchases from the Po-
tomac company, and the latter concern.
to offset the increased earnings thus
acquired, to reduce rates to private
consumers.
The commission served notice of it's
intended action upon the officials of
the two corporations and stated that
within ten days it will set date for
a formal hearing upon the proposed
changes. At this hearing opportunity
will be given the companies to show
cause why the tentatively outlined
orders should not be issued.
Following are the propositions pro-
posed by the commission to which the
companies must reply:
Proposals of the Commission.
"GD Why the Washington Railway
and Electric Company should not be
ordered to discontinue the sale of cleo
trio energy and the appropriation of
the revenue therefrom:
CD why the Washington Railway
and Electric Company should not until
further notice, be ordered to pay to the
Potomac Electric Power Company for
the power used by it and it's subsidiary
Turn frr = b. H.
the compensation agreed upon in the
contract between the said companies,
dated the 23d day of June, 1906, to Wit
The actual cost to the power company
OF producing such electrical energy, in
elusive of interest at the rate of per
cent $50 per annum upon the property
of the power company employed in such
production, together with a profit at
such rate as may be agreed on from
time to time between said parties, or
failing such agreement, at the rate of
10 per cent G0Tc) upon such cost of
production And why this amount so
paid should not be prorated among the
Washington Railway and Electric Com
pany and its subsidiary companies in
proportion to the car mileage of each
"t5) Why the Potomac Electric Pow
er Company should not be ordered to
file with this commission rates for the
sale of power to all other utilities than
the Washington Railway and Electric
Company and it's subsidiary companies
"f4) Why the Potomac Electric Pow
er Company should not be ordered to
reduce its rates to consumers other
than public utilities by such an amount
as will offset the increased amount re-
ceived from public utilities by reason,
of these proposed orders.
Conclusions Result From Hearing.
Although the conclusions drawn by
the commission as to what should be
the proper relationship between the
two companies are based upon long
study of the situation, they are more
directly the result of a hearing Au-
gust % and &c, at which testimony was
given by officials under subpoenae as
TO the working agreement between the
companies.
This testimony developed the fact that
the railway company has been receiv-
ing from the Rennins plant sufficient
power to meet its own needs and leave
il surplus. which it has disposed of
at revenue greater than il paid the
Potomac company for all powex re-
ceived.
The commission reviews this and
other testimony at length, setting forth
in twelve typewriter pages its con-
c!usions and the proposed orders. Cor
poration Counsel Syme, legal adviser to
the commission, assisted in the prepa-
ration OF the report. a copy of which
was sent 10 w F. Ham, vice president
and general manager of both COM
ranies, in the absence of President
King.
AT the outset the commission refers
TO the agreement made by the COM
panIes June %, 1906. under which the
railway company was to receive power
at the actual production cost plus a
payment OF per cent per annum upon
the property employed in production
and 10 per cent per annum profit In
return for these concessions the rail-
way company guaranteed the bonds is
extent of 100000.
Testimony given at the hearing was
to the effect that the corporations in
question regard this agreement as
binding, though they are not operating
on the witness stand declared that the
present arrangement, under which the
railway company has bought power at
less than cost and had enough left to
sell, was modification of the contract
which was acqutesced in by the parties
Not SUBJECT to Review, Is Claim.
They maintained that while the terms
OF the original contract had been de-
parted from, the substituted arrange
ment is one concerned with the ex-
change of facilities between utilities
upon agreed terms and conditions. and
that such agreement is not under para
graph 3 OF the public utilities act sub-
Jsct to review or regulation by the
commission.
With respect to the working arrange
iient employed in lieu of the express
requirements of the contract, the com
mission attacks the legality of the sale
of power by the railway company to
other companies
Referring TO the act of Congress of
Jupe ., 1900, which, ii claims estab-
lisnes by clear implication what shall
be the relationship between the COM
pdnies. the commission states that no
where in the section is the railway
company authorized TO contract for or
purchase power TO sell to other COM
panies nor for any other purposes than
the operation of 1t and its subsidiary
railways
1T is perfectly fair to conclude" con-
tinues the report, that Congress did
not intend that the railway company
should exercise such ownership and
proprietorship over the power company
as TO receive more power than is nec-
essary for the operation of its rail-
ways. sell II to others and appropriate
the revenues therefrom to its own
uses"
Power to Regulate, Says Commission
AS to it's own authority for regulat-
ing agreements between CORPORATIONS