The Washington times., 1925-04-30
RATE GU |
ORDER To
BRING
FIGHT
Restraining Order With I'M
pounding Of Receipts Are
Steps Outlined

: &
The Chesapeake & Potomac
Telephone Go. will resort to court
action to prevent lowering Of telc-
phone rates here, it was learned
today.
If the Public Utilities Commits
sion, in its decision in the presen
telephone rate case, issues ar
order reducing rates, the company
win ask District supreme
Court for an order restraining the
commission from putting the
lowered rates in effect.
Grounds Of Opposition.
In court, the company viii oppose
rate reductions on the following
grounds:
First, that any rate lower than
the present charges would be con-
fiscatOry and, therefore, unlaw-
full.
Second, that the valuation on
which revised rates are based IS
erroneous.
The company VIII use the recent
valuation as its principal argument
of attack. The commission set the
value as of December 81, 1924, as
approximately 18,500,O00, as against
the company's claim of SIS 1000, 900.
The same tactics used ten years
ago by the Potomac Electric Power
Company, resulting in the tying.up
of electric rates for more than a
decade, will be followed by the
telephone company, it is said.
Electric Rate Case.
In the electric company case, n
which the corporation was fighting
lower rates. the court issued an
order temporarily restraining the
Commission from making the
lowered rates effective, pending
disposition of the rate and va1aa-
ton cases. The court instructed
the company to continue to collect
10 cents per kilowatt hour, but to
impound or save two out Of every
ten cents collected. In the final
settlement of this case, made last
December, the court ordered part
of the impounded fund given to the
public and the rest to the company.
An electric current rate of 71z
cents per kilowatt hour was agreed
upon.
There now appears a possibility
that telephone rates may be tied
up in the courts for many years,
with an impounding fund being es-
tablished.
The telephone company, It was
said today, believes that the electric
company Jared well in it's fight
against the valuation establish: ed by
are understood to be confident the
corporations case is a much better
one than the electric company took
into court.
Local Attorney Retained.
Several days ago, George Hoover.
a prominent local attorney, was re-
tained by the telephone company
in the valuation case. He attend
ed yesterdays rate hearing, but
took no part In the proceedings. 1t
the company's case II the corpora.
ton goes into court.
The valuation case dates back
six months. In November, 1924.
the commission called a hearing to
consider lower telephone rates. The
company objected to the hearing,
demanding revaluation of it's
property, claiming that the figure
being used by the commission was
below the fair value of the com
pany.
The commission agreed to a re-
valuation. However, the revised
value, as announced several weeks
ago by the commission. was lower
than the value used by the COM
mission before the company made
it's plea for revision.
Rates are based on value. It has
been the commissions practice 30
allow utilities to earn between 6
and per cent return based on the
valua ton. The telephone company
last year earned about s per cent
and commission officials estimate
the earnings this year will be about
IN per cent.
There was every indication today
that the commission would make
a reduction in telephone rates No
action will be taken, however, Tor y
week. Meanwhile. Attorneys Dczlae
De Vane and Alexander J3rtttCn. fa9