Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-15
HEARINGS ON RAISE
| IN ELECTRIC RATES
| BEGIN TOMORROW
Commission, However, Can
| not Grant Request With
J. out Courts Approval.

The Public Utilities Commission Will
begin hearings in the boardroom OF
the District building at 10 o'clock to-
morrow morning on the application
of the Potomac Electric Power Com
pany for an increase in rates.
Even If Che company proves It's
contention. however that higher rates
are needed under present conditions,
the commission will not have author
ity to raise the rates without nrst
obtaining the approval of the Dlstrlct
Supreme Court.
Rate Reduction in 1917.
In 1917. when the commission or
dered the rate to householderS re-
duced from 10 to cents per kilowatt
p hour, the company obtained an IN
junction under which customers have
been required to pay the lucent
rate, the extra 2 cents being placed
in fund to be returned to the peo-
pie if the Scent rate is finally sus-
tanned in the higher courts.
While consumers have been paying
10-cents per kilowatt hour since 1917,
the company has been getting only 8
cents Considerably more than mil
lion dollars has accumulated in the
fund. representing the difference be-
tween the two rates. This fund prob
ably will not be disposed of until the
courts have finally passed upon the
valuation placed on the company's
property by the commission. 1t was
on the basis of this valuation that the
commission ordered the reduction In
rate in 1917.
Rate Jump Would Cut Fund.
If the commission should, as a re-
suit of these hearings, find that the
Scent rate fixed in 1917 is now In
adequate and should restore the ~
cent rate, the bills of householders
would not actually be increased. The
only difference would be that the COM
pany would no longer have to put 2
cents out of every 10 cents collected
into the fund created by the court.
The company says in it's petition.
however, that it should receive re-
turn of 8 per cent upon it's valuation
and that a restoration of the Decent
rate would yield only 6.4 per cent re-
turn.
May Ask More Than 10 Cents.
This means that the company will
contend at the hearings for rate
higher than 10 cents.
Representatives of the citizens as
sOeiations are expected to oppose CIV
Ing the company a rate that would
yield an per cent return. The citi-
Gems association leaders fear that it
the electric light company is granted
an 8 per cent return the commission
could not consistently refuse to allow
the other utilities the same return,
which would mean increases in car
fare, gas and telephone bills.
No matter what conclusion the COM
mission reaches, however, it will
have to be approved by the District
Supreme Court before the present
rate can be changed.
The Injunction issued in 1917 ties
the commissions hands as far as
electric light rates are concerned.
The order issued yesterday by Justice
Hitz of the District Supreme Court
was merely to authorize the commits
sion to find out whether the rate
should be changed at this time.
If the commission finds that the
rate should be changed the court will
have to modify the injunction to permit
the commission to act
Plea for Higher Rates. seq
In Its plea for higher rates at
this time the company states that
1t will have to expend approximately
$3,209.000 during 1921 and 1892 in
improving and extending it's equip.
necessitate bond issues, the salabil-
fly of which will depend upon wheth-
or the company is earning fair
rate of return.
In addition to these expenditures,
the company calls attention to the
fact that it has maturing on July 1,
1898, S3,600,000 of general mortgage
per cent bonds.
These facts, the company contends,
show the urgent need of maintaining
its credit if 1t is to meet it's obliga-
lions and properly provide for the
demands of the city for service.