Evening star., 1920-05-20
SLIDING GAS RATE
SCALE 0PPOSEDBY
CITIZENS ATTORNEY
Utilities Commission Hears
Argument on Proposed
Increase.

argument on proposed
Increase.
Opposition to a sliding scale Of rates
for gas in the District after June
was voiced by William NICK. Clayton
of the Federation of Citizens Associa-
tions. at the hearing before the IT'LL
tiles Commission at the District build
ing today on the petition of the Wash
ihston and Georgetown gas light
companies for higher rates. The gas
companies have asked the commits
sion to fix a sliding scale for gas, to
be regulated each month by the price
of oil, and Mr.. Clayton argued that il
the oil companies of the country
knew that the local gas company has
authority from the commission to pass
on to the public any increase in the
price OF oil from month to month
there would be no inducement for
them to reduce the oil price. He
pointed out that if, as the company
stated in it's petitions, there is only
one oil concern from which the local
company has any assurance of getting
it's supply. the local company would
be helpless to save itself from any
advance in tie price of oil.
Sliding Scale Explained.
The proposal is to fix basic rate of
s1.0S per thousand cubic feet if oil is
7k cents gallon and to raise the
price to the consumer 4.39 cents per
thousand for every advance of 1 cent
in the cost of oil. This ratio is based
on the fact that four gallons of oil
are required to produce a thousand
cubic feet of gas.
Since the company has had to agree
to pay 12h cents a gallon for oil for
June. the price to the consumer for
that month would be $1.30 per thousand
cubic feet, if the commission adopts the
companies plan.
Oil Companies' stand.
To show why sliding seal should
be established. Howard S. Reeside,
president of the Washington COM
pany. said that he recently wrote to
fifty oil concerns. not one Of which
would make contract to furnish gas
oil for the ensuing year or. any part
of the year.
The STANDARD Oil Company. he said.
has promised to furnish the local
only on a monthly basis and at the
price prevailing each month.
Mr.. Reside declared he was not
able to get a contract even with the
Standard Oil Company, and is not GER
tain today whether he is going to
have oil after the month of June
We can't say what oil will cost US
in July" said Benjamin 8. Minor. of
counsel for the company. I'VE don't
know whether we will get oil after
June And IL this commission Axes
. nat rate for gas we may mud our
selves unable to buy oil"
-~Whaf eMy1 vnsazs aIs0rvaSf to r,s-nfADf
the publfc from tho possibility of the
company paying an unreasonable
price for en under q sliding scale ?''
Lieut.. Col. Kutx. chairman Of the COM
mission, asked.
Protection fer Pablie.
Mr.. Minor explained that the COM
pany would submit to the commits
sion each month evidence to show
what the oil for that month cost be-
fore the bills are sent out to the con-
sumers.
why not have the commission pass
on the price before you get the oil 90
the Commissioner inquired
Mr.. Minor said the company would
gladly do SO IL possible. but he ex-
plained that in the present critical
condition of the oil market the COM
pany would have to get it's oil wher-
ever possible. The only source now
available to the local company, he
pointed out. is the Standard company.
Col. Kutz said the sliding scale ap-
peared reasonable to him, provided
the commission would not lose con-
troll of the price to the consumer
from month to month.
Monthly Data Promised.
Mr.. Reeside and Mr.. Minor replied
that the company mad no desire to
take such control from the commits
sion and would submit to the COM
mission each month all data availa-
bic as to the cost of oil for the sue
ceeding month.
what would happen under the
sliding scale if evidence was present.
ed to the commission that you could
get oil cheaper elsewhere?" Col Kutz
asked.
Mr. Reside said the company would
gladly buy from that source He ex-
planned that the company has no con-
tract with the Standard Oil Company.
He said he felt that he had made a
good bargain at 121s cents a gallon
for the month OF June, in view Of
the fact that some gas companies
are paying II cents. while a number
from any source.
Mr.. Clayton asked Mr. Reside how
he could defend himself if the oil
company quoted him higher prices
for the months after June. The pres
ident of the gas company said he
would not pay higher price for oil
without a fight.
Finds Precedent for Scale.
At the opening of the hearing At
torney Minor told the commission he
had found a precedent for q sliding
scale of gas rates in the District. He
said that in 1874. when gas was being
m hn 80 In< =
commodity was fiuctuating monthly,
Congress passed an act authorizing
the Washington Gas Light Company
to advance the price to the consumer
as the cost of coal advanced and re-
duce it similarly as coal went down.
In answer to query from Mr..
Clayton, Attorney Minor also stated
that the gas company now asks the
commission to allow it a return of Z
per cent on the fair value of its prop
erty. Mr.. Minor explained that dur
ing the war the gas company did not
oppose a 6 per cent rate of return.
because of the commissions ruling to
have the company and the public
bear jointly the burden of war costs.
Referring to the suggestion that a
wholesale rate be fixed for large con-
sumers of gas for commercial pur-
poses, the company stated that only
one-tenth of 1 per cent of its gas
ing places.
While admitting that the overhead
cost of furnishing gas In large guam
titles is less. the company took the
position that to allow wholesale
rate would place an added burden on
the private households.
HANGING POSTPONED.