The Washington herald., 1922-03-02
PEPCO MADE 9.l0
PER CENT IN 1921,
YStOMAISSlON
Company Estimate is 7.66
Based on Its Own
- Valuation.

Potomac Electric Power companv
earned S.1S per. cent In 1921. ac-
cording to figures given yssterdav
by the Public Utilities Commission
at a public hearing on electric rates
held in the board room of the Dis
trht Building.
The rate was based on the COM
missions valuation of the property.
owped BY the Potomac Electric
Power Company. According 10 tine
,company's figures.~ based on their
own valuation. the rate was 1855
FER cent.
The greater part of the hearing
yesterday afternoon was taken up
oy company representatives in ex-
planning how they arrived at their
figures. One difference between the
two valuations resulted from the
comrany's attempt TO include their
income tax as a part of the operat-
Ing expense.
Commiss'on's Previous stand
William F. Ham. president Of the
company. apd an array of legal
talent-consistiug of S. r. Bowen,
Osborne Yellott and John s. Bar
bour-insisted that the income tax
properly belonged under operating
expense.
In 1920 the Public UTILITIES Com
mission took the stand that "the
income tax should be paid out Of
the profits. and not passed on to
the public rhe previous position
taken by the commission was
brought out in questioning Yellott
who maintained that, regardless of
this, the commission should deduct
income taxes in arriving at the
valuation. He further maintained
that the income tax was not a wal
measure and that. like all other
taxes, II was a part of the COM
pany's expense.
Barber asserted that IT was never
the intention Of Congress to take
the income tax out after figuring
the net return.
The cost of money was intro
duced into the testimony by Mr..
Ham, when he asked that the evil
dence of the recent street railway
hearing in regard to the rate that
bankers and brokers demand FOR
the loan of money be included. He
summed up the position of the COM
pany by stating that any cut in
rates would be felt by the public
in the quality of service.
During the Testimony Mr.. Ham
frequently quoted from President
Harding's speech of ship subsidy.
This aroused william Nick. Clay
ton, representing the Federation Of
Citizens Associations. to ask him il
he believed in municipal owner
ship. Mr.. Ham replied that tnat
question was one for the Commis-
sion to decide.
Cost of Extensions.
Further evidence tended to show
that the valuations arrived at by
the Commission and by the COM
pany differed also in that the COM
pany included the cost of extern
siCns as "A part of their expense
for the year. while the Commits
sion spread it over the years in
accordance with the weight of the
coGt resting on the company each
year.
The present rate for electricity
furnished to private homes is S.075
cents per kilowatt hour. The GUS
TONER is actually paying 10 cents
per hour pending a decision by the
Omitted Supreme Court on the COM
pany's valuation. BY the time the
decision is rendered the sum i'm
pounded will probably amount to
S3.000.e00. II the Commissions
valuation is sustained, the sum will
be prorsfed among thousands or
consumers
Asked to estimate the amount of
business the company expected TO
do in 1922. Mr.. Ham stated that
he was unable TO do so. Commits
sioner Charles Keller asked whether
this meant he was willing to leave
the estimating to the Commission.
In summing up for the company,
Mr.. Ham stated that the service
rendered was of such a high char
acter that complaints were rare ex-
cept in cases of error in bills.
Clayton, summing up for the con-
sumers urged that the Commission n
make their reduction so as to bene-
fit the retail consumer rather than
the wholesale consumer.