Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-20
DECEMBER 50 SET
FOR HEARING PEPCO
RATE ARGUMENTS
Order Broadly Drawn to Per-
NIT Full Electricity Cost
Discussion.
KEECH WILL POINT OUT
INCREASED EARNINGS
Clayton to Base Argument on
Growing Consumer Costs Despite
Regular Reductions"

The Public Utilities Commission today
set Tuesday, December 80, as the date
of the public hearing for consideration
of the electric rates for 1881 and other
related matters. The hearing will be
called at $50 am. in room 1o4, District
Building.
According to the notice issued today,
the purpose of the hearing is to consider
"the reasonableneSs, justice and equity
of all rates and charges of the Potomac
Electric Power Co. for service within
the District of Columbia, the consent
decree by the District Of Columbia
Supreme Court, the rates and charges
for such service in the future and the
rate Of return under existing and pro-
posed rates"
Bride Rules Hearing Necessary.
The hearing was called after repeated
requests by Peoples Council Richmond
B. Keech and by William Mex Clay
ton. representing the Federation of
Citizens Associations. Corporation
Counsel William w. Bride ruled that
the public hearing must be held before
changing the rates for next year, al
though this had never been done in the
past.
Mr.. Keech said he intends to argue
that in fixing the rates for 1891 the
commission should take into account the
fact that for several years past there
has been an average increase in the
company's MT earnings Of some 13 per
cent in spite Of the annual rate reduc-
ton. He said this prospective increase
should be taken into account in CAL
culating the new rates scheduled for
next year, something which never has
been done in the past. If this cannot
be done under the terms of the consent
decree, whereby the rates are annually
established, then the decree itself is
totally inconscionable and should be
abrogated," he clared.
The decree provides that the COM
pany shall earn each year 71a per cent
on an agreed valuation, plus weighted
additions in the way of net capital out
lay. If the company makes more in
any enc year, then, although the COM
pany keeps the entire balance, one
half of it is used as a reduction fund
and the rates for the following year are
adjusted SO as to use up this amount
Since the decree was entered in 1924
the practical result of every reduction
has been that, instead of reducing the
company's earnings. they have been
substantially increased, Clayton con-
tends.
Will Argue Excess Profits.
Taking this as starting point, Ar.
Clayton said he intends to argue that
the thorough thing to do would be to
apply three quarters of the excess
profits, instead of one-half, to the an
nual rate reductions. He will argue
that the company has actually been
making a rate bordering upon II per
cent per annum since the decree went
into effect. and that such return Is
much too high.
Two proposed schedules have been
before the commission for the 1881
rates, both of them offering reduction
in the primary rate from Al to AZ
cents per kilowatt hour, with various
reductions in secondary and subsequent
rates, designed to take up about $780,
900 of the company's profits, represent
ing one half of their excess earnings
over 71a per cent on their evaluation
during 1880, with the last two months
figures estimated.
Chairman Mason NJ Patrick Of the
commission, today said that the order
had been drawn in broad terms so that
all questions bearing upon the electric
rates could be gone into and that any
body could place before the commission
any pertinent information without being
shut off on account of going beyond
the scope of the hearing.