Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-25
COUNSEL
JOINS IN ATTACK
. ON ELECTRIC RATES
Citizens Group Representa-
tive Asks Utilities Body Act
to Change Decree.
KEECH CITES INCREASED
USE. WHEN COST DROPS
Charges Excessive Power Company
Profits Since Court Ruling Make
Careful Review Necessary.

Peoples Counsel Richmond B. Keech
today joined William Mckay Clayton
in attacking the decree of Equity Court
under which the Potomac Electric Pow
er Co. rates are fixed and the manner
in which the decree is currently inter-
Public Utilities Commission to make
greater reductions in the electric bills
next year than they now plan to do.
Mr.. Keech's point is that following
every reduction In rates there Is an in
crease in electrical reduction, and that
this increase should be taken into con-
sheraton when establishing new rates
under the consent decree. This has
never been done, nor is it contemplated
by the commission at this time, accord
ing to its public statement recently
issued. If this cannot be done under
terms Of the decree, then the decree Is
totally uncomfortable and should be
abrogated," Mr.. Keech concludes.
His memorandum to the commission,
in part, follows:
Charges Excessive Profits.
The Potomac Electric Power Co.
will submit within short time, ac-
cording to the commissions announce
ment on November 81, new schedule
of rates. The excessive profits which
the company has made for the year
just coming to close and, in fact,
since the consent decree went into eff
feet, make 1t imperative that the COM
mission give serious consideration to
any schedule offered by the company.
Every element should be taken into
consideration so as to insure fair rate
under all of the circumstances.
1T is my opinion that the commission
should refuse to approve or adopt any
schedule submitted by the company
which would produce a net operating
income, which, when supplemented by
$500, 800 (publicS half of excess earn
ings for the year, 1890, would exceed
T12 per cent on its par value. In addi-
ton, the commission should give due
consideration to the fact that the con-
sumption of power in. this jurisdiction
has increased in the average of about
Is per cent annually.
If 1t Is felt that what has been out
lined above cannot be done under terms
of the decree, then the document Is
totally unconscionable and should be
abrogated. The commission not only
has the power, but 1t is its duty TO do
so under the circumstances"
Decree Declared Not Permanent.
Mr.. Keech next addresses himself to
the proposition that the decree was
never meant to be permanent. If such
a decree we're possible, then it would
mean that the present personnel of the
commission with the consent of the
court could agree to enter into an agree
ment with the utility group. which
would remove from the statute books
an act the constitutionality Of which
never has been doubted, he declares.
Should 1t become necessary to abrogate
the decree, Mr.. Keech points out that
the commission should set rates taking
into account the compromise figure on
valuation reached by use of the decree.
Although both the company and the
people consider this inequitable to their
respective interests, 1t is the most
definite figure which can be aScertained
short Of a retaliation.
Clayton, chairman of the Public IT'LL
tiles Committee of the Federation of
Citizens Associations, made his second
attempt today to get open hearings on
the rates with almotion asking the Pub
lie Utilities Commission to seek to have
changed the consent decree of Equity
Court, under which the rates are an
nually adjusted. He asked the COM
mission to seek reformation of the
decree so that three-quarters instead
of one-half of all earnings of the Po-
tomac Electric Power Co. above 712
per cent on its valuation be applied an
nually to rate reduction.
In his first attempt Mr.. Clayton did
not specifically attack the consent de-
cree, but contented himself with seek
ing an open hearing on the whole mat
ter. In the present motion, although
not specifically asking for the open
hearing, he made his request in such
a way that a public hearing could
hardly. be avoided If the request were
to be granted.
The commission did not answer Mr..
Claytons first request. Instead, several
days after 1t had been received, it is
sued a written statement to the effect
that the commission and the Potomac
Electric Power Co. had come to an agree
ment as to the terms on which the re-
duced rates for 1881 will be calculated
In his new petition, Mr.. Clayton
points out that his first petition has re-
manned unanswered, and builds up his
case by pointing out that under the con-
sent decree as it has worked in practice
for the past six years the company has
earned $25.286, 500 net on an average
agreed valuation (undepreciated) of
sal 800 900, or an annual rate of re-
turn to the company of 10 per cent.
This represents SIC, 744, 900 in excess of
a 6 per cent return. he said, or $8,372,-
900 in excess Of an per cent return.