Evening star., 1924-11-05
COMPROMISE LIGHT
RATE |SADVOCATED
Clayton Wants Utilities Body
to Halt Fund Impound-
ing by Pepco.

The hearing called by the Public Util-
ltles Commission today to consider a re-
duction in electric light rates took
an unexpected turn when William
Mch- Clayton, representing the Fed
Grafton of Citizens Associations,
proposed that some effort be made to
| prins about an agreement between
the commission and the Potomac
Electric Power Company that would
stop the continued impounding Of
large sums of money while the value
OF the property is being fixed in court.
AS the situation now stands, the
company is and has been since 1917
collecting the old rate of 10 cents per
kllowat hour. The rate regarded aa
| reasonable by the commission Is only
| 7.67 cents.
Mr.. Clayton pointed out that dur
! ing the past seven years OF litigation
So,9o9,3l0 has piled up in the funds
| representing the difference between.
| the two rates, and declared that tho
prospects are that this impoundiAT
will go on indefinitely unless some
| settlement can be arrived at.
Suggestion of Mr.. Clayton.
| Mr.. Clayton's specific suggestion
was that Il tentative rate somewhere
between the Commissions rate and
| the old l0-cent rate be agreed upens
I BFliIiIS liIe MIA IlAlnS OF the td1Ud-s
ton, which would make it possible to
| stop Immediately the impounding OF
money
William +. Ham, president OF th3
Electric Light Company, when asked
by Chairman Bell what he though OF
the suggestion. replied that he could
not speak for the company on so i'm
portant q matter without consultin:.-
the directors
n
added, 4 think it is unfortunate tG
go on in litigation if there is a pos
slbility of an agreement that woulc'
| he falr to the company and resuik
IN a direct benefit accruing to th&
public. There is nothing facing Us
now. but years of litigation"
Evan H Tucker of the Northeas@
! citizens Association said il woul,.
he unfortunate if as a result ~
the present litigation, the Commits
! sion would have to 60 hac.!
10 Congress and ask for a large
fund to revalue the electric lightm
properly completely He said tha :
IL a compromise is possible he be-
lieFed the citizens generally woul .
favor it,
Plan Tentative Order.
Engineer Commissioner Bell ad-
journed the hearing at noon with
: the announcement that the assistants
Of III" Commission would prepare i
/ tentative order setting forth any
chang" in rates deemed advisable.
and that il practicable. they would
incorporate i'll that tentative order
any plan that might be worked out
as result of Mr.. Clayton's sugges-
| tipn, This tentative order, he said
would then be considered by the
/ Commission at future public
! hearing.
Maj. Bell said he wanted it made
clear that the Commission itself would
not attempt to reach an agreement.
but would consider at the next hear
ing any proposals that might be put
forward
Aside from the suggestion OF Mr
Clayton for some sort of settlement
that would nut a stop to the impound
ins. the outstanding feature of to-
days hearing was the contention OF
Attorney Samuel r. Bowen that the
Utilities Commission would be in de-
ftance Of the District Court of Appeals
tif ii attempted to fix lower electric
HEht rates based on the commissions
Naludti"n Of the property
MIR. I@oTcn declared that the pf=-
trlct Court of Appeals has held the
commissions valuation to be errc-
neous and that any rate order OF the
commission based on that valuation
would DC null and void
Basis u Opposed.
! Mr.. Bowen further contended that
even il the District Supreme Court.
which now has the valuation dispute
before it, should fix the value as Of
1916. instead Of as 1914, the date used
by the commission, the electric light
company would still have to contend
that rates could not now be fixed
upon such a valuation.
The company would contend, he
said, that a revaluation of the com
panys property as of present day
prices would be necessary on which
! to base the rates for current. At
the opening of the hearing Earl V.
Fisher, executive secretary of the
commission, took the stand at the
request of Maj. Bell and testified as
to the earnings of the company Tor
the yeaN ending July 81, and on which
figures it was decided to hold hear
ing. Mr.. Fisher testified that he found
the company earned d return of $50
per cent on the commissions valua-
tion for the year ending July 81,
which, he said, amounted to $6f1.1s1
in excess of the per cent return.
lie based this calculation on a
weighted valuation of the company's
property of $22.690,0a3 as of the
present time. The amount on the
Con2panS'S DOORS as depreciation funQ
was not deducted from this valuation.
Wants Compromise Rate.
Mr. Clayton. in discussing later the
suggestion he made, explained that
his idea was to have the commission
and the company agree upon a rate
for current somewhere between the
7.6I cents fixed by the commission
and the 10 cents which the company
actually collects. 1t was his thought,
he said, that this agreed rate would
he only for the period that will elapse
before a final value of the company's
property is settled, and would have
the effect of eliminating the present
process of piling up in an impounded
fund part Of the money paid by
consumers every month.
Mr.. Clayton stated that this could
be done without attempting to dc
already accumulated should be diyid-
ed. That money, he said, could re-
main in the fund until the courts
have finally disposed of the valuation.
case. In view Of the events which
transpired at the hearing today. the
company did not present any evidence
as to its present earnings in answer
to the figures submitted by the com
mission.
When Mr.. Fisher testified as IN
what the commission found the COM
pany was earning, Attorney Bowen
moved that all of the testimony he
stricken from the record, because il.
was based on the valuation declared
by the Court of Appeals to be err
roneouS.