Evening star., 1923-04-04
ELECTRICITY RATE
REDUCED SLIGHTLY
EFFECTIVE APRIL |
Consumers to Benefit OnIy
by Possible Future Re-
fund, However.
NEW HOUSEHOLD CUT is
SEvEN.HUNDREDTHs CENT
Public Utilities Revision Contin-
gent on Pending Valu-
alton Case.

The Public Utilities Commission to-
day announced a reduction In the
rate for electricity used in house
holds. effective April 1.
For the first sixty hours the new
rate will be rs cents, as compared
with the old rate OF 7.67 cents This
is a reduction of seven-one-hun-
dredths Of a cent. Current In excess
Of sixty hours will be 4.s per kiio-
watt hour in place of the old rate of
4.s6 cents
Slight reductions also were made
In several of the other schedules
OF the company for current used for
other purposes
Although these reductions are ef-
fective as of April 1. the consumers
Of electricity will continue to pay
the pre-war rate of 10 cents per
kilowat hour until the valuation case
now pending in the United States Su-
preme Court is finally settled
The effect of the reduction, there
fore. Will be to increase the amount
OF money being set aside by the COM
pany IN the impounded fund to be
returned to the consumers OF cleo
trictty IL the commission wins the
court suit. This fund has been ac-
cumulating since the valuation case
was taken into court in 1917 and
now amounts to almost $4,000, 900.
In Its decision today the commits
sion again states its belief that the
Potomac Electric Power Company
should pay its income taxes out of
Its net income and not pass IL on
20 the public as an operating ex-
pense.
Commission's Decision.
The order of the commission reads
In part as follows
The estimate of operations for the
calendar year 1928, submitted by the
company at the hearing in this case,
includes the estimated capital ex-
penditures for that year, an increase
OF approximately per cent in sales,
and allowance for the cost Of coal
passed on the average prices for the
last three months OF 1922, and as
sumed no increase in other operating
expenses. On this basis the estimated
amount am available for return is S1.675.-
SI1.60. or 7.99 per cent on the weight
ed fair value for 1929. The question
OF deducting the balance in the de-
probation reserve from the value of
the company's property in arriving
at base for rates. and the question
OF the exclusion of federal income
taxes from opers ting expenses. are
not considered in the foregoing esti-
mates for 1928. This case is the re-
suit OF the commissions initiative.
The rates now in effect in the Dis
trfct OF Columbia are reasonable and
compare favorably with those in ef-
feet in other large cities where power
plants are operated by steam. What Is
desired by all Is good service, and this
implies dependability as we'll as rea-
sonable rates. To insure dependable
ity, and for the business man particu-
larly, this Is the first consideration. it
Is necessary that the company shall
always be in a position to keep the
capacity OF its plant well in advance
of the demand upon II. To insure
economy in generating energy II Is
necessary that the company shall
keep well abreast of progress in the
mechanical and electrical arts, INSTALL
promptly when their worth has been
demonstrated.
VIII Not Impair Credit.
ITO do these things the company
must be able to raise funds in COM
paratively large amounts. To enable
this money to be secured at reason
able rates, II at all, requires that the
company shall have good credit. 1t Is
therefore in the interest OF the entire
public that rates be not reduced so
low as to prevent that healthy growth
of the company's facilities without
suffer serious losses and inconven-
fences Of various kinds. The commits
sion does not, therefore, believe re-
turn of 7.s9 per cent, more or less. to
be excessive. but II Is nevertheless
Of the opinion that the circumstances
Of this case warrant q reduction In
the present rates of the Potomac
Electric Power Company. and that
this reduction will not impair the
company's credit or its ability to
"The elimination of all but one deci-
NAL place in the present rates. and
the elimination Of fractional amounts
in the flat-rate steps in schedule and
schedules. will result in a reduction
of approximately $4,000 per annum
after allowing for an estimated in
1924"
In this decision the commission
tho Federation of Citizens. Associa-
tions that the 100000 Of property
added to the company's valuation
since 1t was valued in 1915. has never
by the commission. In answering this
claim of the federation, the commits
sion says:
Most Exact Valuation.
'It has audited the books OF the
company each year and analysed the
purchase and construction vouchers;
Il has, through inspections, examined all
new property and equipment. and all
such property has been thoroughly
passed upon the review. as required by
law, before the certificate OF the commits
sion authorizing the issuance of bonds
to pay for that property, has been
given. There is no better method OF
valuation known than the ascertain
ment OF, the actual cost of property
where such cost represents the invest
ment honestly and prudentiy made.
The commission believes this to be
the most exact possible kind of val
uation and in accordance with the
provisions of the public utilities act"
The commission states that when
the power company's property was
valued in 1916. the balance in the de-
preciation fund was $821.66S.01. On
December 81 last the balance was
$2,730.232.S5. showing a net accrual
during those six years of S1.se8.-
5S4.s4. After setting this up in detail
in a table, the commission goes on to
say:
TT Is quite evident from this
analysis of the depreciation account
that the reserve Is growing rapidly
IN such size that II fS necessary