Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-16
CITIZENS OPPOSE
9PER CENT RETURN
ON ELECTRIC PLANT
Attorney for Federation OF
Associations Asks Para
graph Be Stricken Out.

Opnosition to the claim OF the Fo-
tomac Electric Power Company 1or
return of per cent on its Valua'ioii
featured the opening of the nearing
before the Public Utilities Commission
TODAY on the application of the COM
pany for higher rates.
William NICK. Clayton. attorney ior
the Federation of Citizens Assocla-
tions, asked the commission to strike
from the companys petition the para
graph in which an per cent iate VI
return on fair value is asked TOT.
Mr. CLAYTON argued that there Is
nothing in the public utilltles acl
which gives the commission author.s
to fix a defnate rate OF return upo"
the value of the property OF the com
nany. The rates which the commls-
sipn allows the company to charge TOT
current may result in the company
earning 5. s or per cent upon Iair
value, but that rate Of return Is IN
cidental to the fixing of scheduies 10
be charged by the company, Mr.. Cray
ton argued.
Contention to Be Considered.
"a, Charles w. Kutz. chairman of
the commission, said he saw no -useLu
purpose that would be served oy
striking out the paragraph referrine
to the rate of return but added tnat
the commission would give carelul
consideration to Mr.. Clayton's con!en-
ton.
Mr.. Clayton announced to the com.
mission that he also will contend al
this hearing that the commission mas
the right to fix the rates 10 pc
charged the federal government lot
current. and he requested that the
company bring into the hearing the
contract which 1t has with the gov
ernment to see If the rates allowed
Uncle Sam "are on all fours with the
rates fixed for private consumes
William F. Ham. president OF tne
company. was the first witness TO taKe
the stand, and explained that II the
company's application for a restora-
ton Of the rate of 10 cents per kilo-
general public, or householders. would
not have their bills increased. These
customers are now paying sl0 cents.
but the company gets only = cents:
the other cents going into fund
created by the District Supreme Court
in 1917. The effect on private homes
Of granting the company's application
would be merely to stop payments
into this court fund.
Would Return Money.
The money in this fund. represent
ing the difference between the eight
and ten cent rates. is to be returned to
the public If the eight-cent rate is up
held by. the court and given to the
conpany II the ten-cent rate is upheld
Nr. Ham testified today however.
that the granting of the coEnpany's
present application would mean in
creases for groups Of users other than
private homes
From schedule E, or large wholesale
consumers. the company would get a
total of S244.s1o more year. Mr.. Fam
testified.
From schedule G consumers. who are
~ t~t~ A <H<NYvA-
pany seeks to abolish. $11,454 addition
NJ revenue would go to the company.
From the District and federal gov
ernments for an increase In the rare
for street lighting $63.911 would ac-
crue to the company.
increases, together with q restoration
of the ten-cent rate to private house.
holders, would yield in the neighbor-
hood Of 8 per cent on the fair value
Of its property.
submits Detailed Figures.
After Mr.. Ham had finished submit
ting detailed figures in support of the
branched of into a discussion of the
advisability of developing current by
water power at Great Falls.
Mr.. Ham said that il current could
be produced more economically by
water power than by steam it should
existing conditions he does not be-
lieve it could be produced as cheaply
by water power.
:. 'If it should be found" interposed
Commissioner Brownlow. that the
cost of production by steam and by
water power is about the same. would
it not be better to develop the water
power in order to conserve coal?"
Mr.. Ham said that would be taking
a broad view Of the question. He made
"a q hn nj
other materials that would enter into
the development of Great Falls would
Offset the saving in coal.
Mr.. Clayton told Mr.. Ham that the
impression prevails in some minds that
the company acquired rights at Great
Falls without any intention Of develop
ing water power there. Mr.. Clayton
asked il that impression is correct.
Says Impression In Not Correct.
Mr.. Ham replied that such an impress
sion is not correct. The company, he
said, is in the market for water power
development now if it can be shown that
water power can be developed as
4. economically as by steam
The president also called the commits
sion's attention to the fact that il Great
Falls is developed an auxiliary steam
plant of almost equal capacity would be
needed for emergencies.
'In other words" said Chairman
Kutz, Great Falls should be developed
in conjunction with the steam plant at
Benning. either through contract with
the company or purchase by the gov
ernment?'
Mr.. Ham replied that was correct.
The question of water power was
brought up while Mr.. Ham was ex-
planning that the company would have
to spend about a million dollars a
year for the next ten years to meet
the demands of Washington for serv-
ice. 1t was in this cOnnection tina I
Chairman kutz asked II it would not
be advisable to develop water power
at Great Falls.
After the brief discussion referred
to had taken place Mr.. Ham remind
ed the commission that the question
of whether Great Falls should be de-
Veloped is soon to be inquired into
at the direction of Congress and
therefore is not pertinent to the pres.
ent case.
Hard to Get New Capital.
In an effort to convince the commits
sion of the necessity of raising tn
company's rates if 1t is to extend IT
plant to meet the needs of the city ii
the next few years, Mr.. Ham declare,
that the company cannot induce peopl
to invest the necessary new capital ii
: turn can be~shown.
I'VE cannot coerce people into put
ting money in our enterprise" said tn
witness. I'VE are competing for capi
tai the same as we are competing 70
labor and materials. and in order t
get il we must pay the price,"
He compared the company's situatio
to that of the District government ii
self. by pointing out that the Commits
sioners had to ask Congress for great
ly increased appropriations this year /
: order to meet the growing needs of tn