Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-05
Cut Based on ST, 242, 1866
Excess Earnings of Poto-
mac Electric Co.
CONSUMERS Benefit
THROUGH AGREEMENT
Believe Charge Will Be Lowered
From So Cents to Cents
a Kilowatt Hour.

A substantial reduction in electric
current rates, effective January l, was
forecast at the Public Utilities Commits
sion today on the basis of calculations
which show that the Potomac Electric
Power Co. will earn approximately
$1,242, 336.76 this year in excess of a
7A per cent return on it's valuation.
Under a compromise agreement be-
tween the company and the commission
in 1924, in settlement of the companys
appeal from the valuation of it's prop
erty by the commission, the company
each year is required to reduce rates If
the net earnings in the preceding year
exceed ~ per cent on the valuation.
The earnings in excess of this percent
age are divided equally, the company
taking one-half and the consumers the
other in the form of reduced rates.
Based on 1O-MOnth Period.
The excess of $1,242, 336.76 is based on
the 'company's report for the first 10
months OF this year and an estimate of
its earnings for the last two months.
By virtue of the compromise agreement.
one-half OF this amount, or 1921, 1853 .38,
Will be applied to the rate reduction
AS the power company has not vet
submitted It's proposed new rate sched-
ule to the commission, it is not known
now 1t plans to distribute the reduce
ton, and attaches of the commission
are unable to calculate the probable
cuts 10 the various classes of con-
Sumers. 1t is believed, however. that
the domestic rate, which affects the
greatest number of consumers, will be
lowered from So cents a kiloWatt hour
to cents or less.
The domestic rate for 1929 was re-
duced from So to So cents. A similar
reduction could be made in the 1890
schedule, 1t was pointed out. since the
proIlts IN excess OF 712 per cent COM
pare with those in 1928, which amount
ed to Sl,250,000, one-half of which was
returned to the consumers in the form
OF lower rates. The company, however.
is reported to be considering a more
general distribution of the reductions
over all classes of consumers, CONNER
clal as well as domestic, which may not
permit such large reduction as last
year in the domestic rate. Otherwise,
IL was said, the domestic rate could be
cut 10 ABOUT AZ cents kilowatt hour.
Conference to Decide Rate.
The estimated net earnings of the
company for the current year in excess
OF TIE per cent on it's valuation are
figured at $1,227,339.5O. To this is
duOeu 914,SSIzo, winch represents one
twentieth of the unrefunded impound-
ed fund which reverted to the company
under the court decree in final adj
Judication of the valuation case.
The new rates are expected to be
definitely determined within the next
two weeks at conferences between mem
bers of the commission and officials
OF the power company. In accordance
WIN past custom, the reductions would
be effective on bills rendered as of
January l, regardless whether the cur
rent was consumed wholly or in part in
December.
II the reduction is spread over all
classes OF consumers, approximately
$4,000 would be affected, 10000 of
whom are in nearby Maryland.
When the compromise agreement
first became effective, domestic cur
rent rates were 10 cents a kilowatt
hour. Annual reductions brought the
rates down to the present So cents q
kilowatt hour and they are now
destined to drop to cents or less next
year.