Evening star., 1928-08-12
GAS VALUATION
HEARINGS TOOPEN
Public Utilities Commission
to Take Up Work To-
morrow Morning.

Open hearings Will be started by tht
Public Utilities Commission tomorrow
morning on the application of the
Washington and Georgetown Gas Light
Cos. made year and a half ago, fol
revision of their valuation.
While the companies have not come
out In the open to request higher gas
rates. the probability of such request
is recccnige6 If the reproduction
theory. following the law as laid down
in the Capital Traction Co. case by the
District Court of Appeals. is applied to
a levaluation Of the gas light prop
critics,
Representatives of the Federation OF
Citizens Associations, who took lead
ING part in the recent street railway
merger hearings. will "Sit in" at the
hearings. which may or may not be eX-
tended over a considerable period OF
this time.
Companies TO Speak First
Col Harrison Brand, jr., of the Pub
lie Utilities Commission explained that
thp Gas light companies would be per-
r,}tfAS 10 nreSent their case first.
through engineers and accountants.
The commission may require some time
to so over the inventory and preSenta-
tion of the case before proceeding 1ur-
ther with the hearings it was Sug-
rested, in which event there probably
would be ordered an indefinite recess.
The application for revaluation was
FLED in January. 1926, along with m
,ventories Of properties which. according
10 estimates Of commission ohlclaS' COST
spuroxnately 100000 TO make.
Being without funds at the time 10
undertake the work. the commission Sc
ctar~dS an act of Congress March =.
1927. allowing the cost of valuation pro-
-cee0irqs 70 be charged against the COM
NAMES involved. Under this arrange
ment the utility companies WOULD be al
lowed 10 amortiZe this cost out OF op-
Grating expenses over a period OF years.
since enactment Of this legislation the
work has been going on under q valua-
tioY, staff organized by the Public utn-
fties Commission The commissions S
engineering and accounting force mas
done q psinstaking job OF 1t, ana IL Is
expected there will be little questioning
Of the accuracy Of the figures suonitVeo'
Companies Are Linked.
While the two companies are not
merged. il is said that al the stock Of
the GEORGETOWN company Is helo anu
owned bv the Washington Gas Light 90.
.T,1st what effect a higher valuation
rrn,,ld naya on the rate of return en-
snvad nv the light light companies IN re-
cent wears is a matter Of primary inter-
est To the public at this time in view OF
the probability Of the hearings beng
used later to increase local gas rates.
The gas rates for both companies now
Is 81 per 1000 cubic feet of gas. Tnelr
return on their joint Valuatlon Oh
si7l36. .4s2 last year, under these rates,
ves 7 So Der cent This is slightly
higfler than the 7iz per cent allowed
the Potomac Electric Power Co, rate
Txe6 BIZ Law. II is regarded by most
experts that any substantial increase
!r the valuation Of the gas light COM
panv properties would bring the rate OF
return below per cent.
Last Value Is for 1915.
The valuation Of the gas light COM
panies now on the books Of the Public
TytiIities Commission. upon which the
present 81 rate is fixed, represents the
valuation found as far back as 1915,
MUS additions and bettermentS mace
during the intervening years.
II is evident that move VIII be mace
tyr tl1e coupanies TO FIX their new Valu-
sfSon AT the amount II would take TO
reproduce properties at today's price
Levels. This would be IN accordance
with the Law as Iald GOWN py LIle CouE 10
tn the Capital Traction case Enich was
used 70 determine the valuation OF the
washington Railway 81 Electric Co. IN
the recent street railway merger hear
tngs
The Public Utilities Commission has
never taken the Capital Traction case
On appeal 70 the United States Supreme
Court. Whether the gas company case
viii eventually be used by both sides TO
obtain a ruling by the Supreme Court
to decide the vexatious question OF
valuation for all time. is matter for
considerable conjecture.