Evening star., 1925-05-12
CUT IN PHONE RATE
MAY Be APPEALED
Company Undecided Regard.
ing Reduction Ordered by
Utilities Commission.

Officials of the Chesapeake and Po-
tomac Telephone Co. We're still unde-
cided today whether they would ap-
peal to the District Supreme Court
from the decision handed down by the
utilities commission yesterday after
noon. reducing rates on residential
telephones.
The Commission cut unlimited house
hold service from s. to S475 a month
and ordered that the company give
two-party line customers 40 calls in
stead of 80 month for $3.50. This
increase in the number of calls on
party line service is equivalent to a
reduction for that service comparable
to the cut in the unlimited rate.
The reduced rates are calculated to
give the company return of Z per
cent upon the new valuation placed
on the telephone property of approx
imately s1S,500,000.
President Berry Delays Action.
A. E. Berry, president of the COM
pany, said today he could not make
a statement as to the future course
of action until the decision of the
commission has been mora carefully
considered
lection is against the valuation on
which the rate cut was based, it il,
probable that if court action is taken
1T will involve the rate case as we'll
The company is known to be of
the opinion that in fixing the value
at S1S,57S,956 the commission erred
In the allowances it made tor over
heads. going concern and in the
amount subtracted for depreciation.
the company probably will make
known its purpose soon, since the
commission ordered that the reduced
rates be made effective on June tel
ephone bills
Radio Service to Continue.
Although the commission refused
to allow as a telephone operating ex.
pense approximately $4,000 a year
spent in maintaining the WCAP ra-
dio station. President Berry has stat.
ed that the company will not curtail
its radio service at this time. The
capital investment made by the COM
Pany in installing the broadcasting
station also was disallowed by the
commission in arriving at the fair
value of the telephone property.
AT the rate hearing the company
made strong plea for a return of
per cent on valuation, which would
have precluded reduction in rates,
The reductions in rates will mean
a saving to the public of about $50
600 a year. Maj. w. E. r. Covell. as
sistant to the commission, said the
new rates may yield the company a
fraction more than per cent due to
the difficulty of fixing monthly rates
that will produce an exact rate of re-
turn.
William Nick. Clayton, representing
the Federation of Citizens Associa-
tions, argued for a reduction at the
rate hearing, contending the return
should be per cent.
Reduction Preceded by Inquiry.
The reduction in rates marks the
elimination of an inquiry that has
been in progress for about six months
beginning last Fall, when the COM
pany requested a revaluation of IFS
property before any change in rates
was considered
officials of the commission now
are enaged In computing what it cost
the company to carry out the revalu-
alton and how much of that expense
the company should be authorized ia
reclaim from the rate PAYERS in
amortization. A large part of the
valuation expense represents an in
ventory of the property that was
taken.