Evening star., 1921-09-06
BOARD FIXES RULES
FOR DEPRECIATION
Utilities Commission Makes
Public Tentative Guide
for Valuation Work.

Rules to be followed by the various
public utilities in the District in figuring
depreciation on their properties were
completed by the Public Utilities Com
mission today and submitted to the COM
panies for their consideration.
Before declaring these rules in effect
the commission will hold a public hear
ing in the boardroom Of the District
Guiding at 10: 80 on the morning of
September II to enable the companies
10 call attention to any changes which
they believe should be made.
As announced in The Sunday Star. the
commission has omitted for the present
consideration of telephone depreciation,
recognizing the company's claim that
the Esch- -Cummins transportation law
gives the Interstate Commerce Com
mission jurisdiction over telephone de-
probation accounts.
Copy of Tentative Rules.
A copy of the tentative rules of
depreciation made public today re-
veals that few utilities are exempt
ed from the new requirements. Ex-
planning these exemptions. the COM
mission states:
The commission believes that the
following small utilities should be
exempted from the provision of the
proposed order in this case. as some
of them have been and are providing
Cor depreciation on the basis pre-
scribed by the commission at the
time of the valuation of their prop
critics was ascertained. and at the
rate fixed therein, while others are in
such a financial condition as to rem
rules inadvisable: Town Taxicab
Company. Auto Livery Company (Fed-
Grated Taxicab Company Union
Transfer Company. Washington Mar
ket Company. East Washington
Washington and Maryland Railway
Company"
The depreciation accounts are to
be kept on a 4 per cent sinking-fund
basis.
Using the value of depreciable
property. as of December 81 last. and
applying the new rules to those
values. the commission finds that the
various companies should set aside
the following sums annually for de-
preciation:
sum. to BE Set Aside.
Capital Traction Company. $685.
Electric Company. including its sub
urban subsidiaries, 41.195.06; Po-
tomac Electric Power Company. s252.-
4S1.42; Washington Gas Light Com
ERSt P1RS company ss snd Ts1
minal Taxicab Company. $47,536.02.
The depreciable property of the
Capital Traction Company as of jan
uary l is found by the commission to
be s1o.O55.6o1.74; of the Washington
diaries. $11.4s3.110.77; the Potomac
Electric Power Company. s14,751.-
1926: Washington Gas Light Com.
pany. $1o,Os5.623.57: Georgetown Gas
Taxicab Company. s343.17s.62.
In the statement issued to the COM
panies today. the commission lays
down the following general instruc-
tions to be followed in determining
what expenditures should be charged
to the depreciation fund and what to
operating expenses:
General Instructions.
when it becomes necessary to re-
new or replace any one or more of
the principal or major parts Of prop
erty herein defined, the cost of the
unit or units so replaced shall consti-
tute a charge to the retirement re-
serve. to be accounted for in accord
ance with the accounting procedure
prescribed in this order When actual
cost is not known the commission's 8
reproduction cost figures shall be
used.
when it becomes necessary to re-
new or replace some part of any
structure. facility or unit of property
of less extent than defined herein. and
such replacement does not amount to
a substantial change in identity of
such property or does not add to its
life or capacity. the replacement of
such part shall be considered a repair
and the cost thereof shall be treated
as an operating expense to be charged
In accordance with the prescribed ac-
counting procedure.
Where the application of these
rules and regulations in any special
case is unreasonable or impracticable.
the question should be referred to the
commission for it's determination.
These rules shall not be construed as
authorizing the parceling of expendi-
lures for replacements and renewals
in order to avoid proper charges to
the retirement reserve account.
Where any utility operates more
than one class of business such as a
combined street railway and electric
light and power company. these rules
and regulations shall be applied to
the different classes of business as IL
they were operated by separate and
distinct corporations"