The Washington times., 1916-01-06
Measuring a little patients chest
development.
Heard BY COmmission

the principal and interest OF the
bonds of the power COMPANY
Heard By Commission.
Last August there was hearing be-
fore the Public Utilities Comm ssion IL
the matter of this agreement. The tes
timony uncontradicted by the power
company, showed ~ that the power
/ company had constructed and owns the
power plant and machinery; (2) that the
| railway company did guarantee the
bonds; but that (3) the railway com
pany gets its current from the power
company at less than cost; that 90 II
sells part Of the power so received
and pockets the profits: that (5) the
railway company does not as the agree
mept provided, pay per cent interest
used in the manufacture Of the current
1t gets, and that CO.. the amount &C
tually paid does not include any profit
was to have been agreed upon. nor
does it, i'm lieu of an agreed profit, pay
the alternate rate of 10, per cent on the
cost of production specified in the
agreement.
Uncontradicted at any point and not
even cross-eXamined by counsel for the
companies, the statistician of the COM
mission. testified as to the details of
the present arrangement. From the
sworn statements of the companies and
correspondence between them and the
commission. he showed that of the
l01 900, 900 kilowatt hours of current pro-
duced by the Potomac Electric Power
Company, it retained 43,OI9,S34 for COM
mercial light and power to its custom
ers, and that the railway company
took 57,90i.0S6 kilowatt hours for rail-
way purpose.
companies for the year 19lS-and the
statistician testified that conditions
were practically the same for l9l4-the
power production expenses for the year,
exclusive Of maintenance were, for the
power company $l53, 5S5. 4S. and for the
railway company $172.2SAS6. In other
words that the power company.
using AZ per cent OF the power
Of the expenses, and that the railway
company,> using 81 per cent, paid 90 per
cent of the expenses. For the main
tenance of the power plant, exclusive
Of buildings, the power company paia
S43, 665. 10, and the railway company S.3b
For the maintenance expenses OF TIE
power plant buildings the Potomac
Electric Power Company paid $L4n;B
and the railway company nothing. The
railway company charged OFT nothing
for depreciation on account of the Ben
ming plant. whereas the power com,
'pany charged off $10S,O07.2l for general
amortization including the Benning
From this It was shown the power
company paid 1888, .36 and the railway
company $172,2n7O for power production
expenses at the plant for the year, IN
Guiding maintenance, but exclusive OF
depreciation.
from his figures that the average cost
OF producing the power at the plant for
the year, exclusive of depreciation, was
0.367 cents Cthree hundred and sixty
seven thousandths of cent? per kilo-
watt hour; and that the power company
paid 0.461 cents and the railway COM
pany 0297 cents for the power received
by them respectively.
At Less Than Cost.
THAT a portion of this current which
the railway company received from the
Bennings plant at apparently less than
cost" testified the statistician. lis sold
at a profit appears from the following:
AS stated above, the railway company
paid $172, 24l.7O for the production of all
the power received by 1t from the power
plant during the wear. The annual re-
port of the company shows that 1t pur-
chased power from some other sources
not stated at a cost of S6,S2S.3O. This
gives a total of S179,07O as the cost of all
the power received by the railway COM
pany during the year. The total of the
substation expenses, transmission eX-
penses. and distribution expenses for
all power. including both the power sold
to other railways and the power used
by the railway company for the carry
ing on of its own business of transport
tation is $4O,560.S2, as given In its an
nual report. The report further shows
that a portion of this current was sold
to railway companies for $257, 1852
I'm other words, this amounts to say
ing that the railway company received,
transformed transmitted and distribute
ed all the power used by It. free of cost
and, in addition, sold enough to make
profit of $S7,Sl6.1O."
In still other words II would appear
from 'he testimony that IL no such
agreement existed between the two
companies. II the Potomac Electric
Power sold direct to the Washington
Railway Company the current the lat
ter uses at cost. and sold direct 10 the
other lines which buy from the Wash
ington Railway and Electric Company,
II would, 1t appear. receive, in addi-
ton to its present gross income, the
sum of $3.50, 1859. or the amount which
the subsidiary railway companies pay
the Washington Railway and Electric
Company.
SuppOsitiOn Incorrect.
This suppositlOn. however. Is not an
accurate one, for, of course II the power
company sold separately to the Wash
ingtOn Railway and Electric and to the
latter's subsidiaries. the Washington
Railway and Electric would not take
the amount of current ii now takes
from the power company,
Assume, however, that the Potomac
Electric Power Company. instead OF
letting the Washington Railway and
Electric Company have its current at
less than cost. would charge 1t the same
price which the Washington Railway
and Electric Company charges it's sub
salaries for the current II resells them.
Il NHHaH. ~