The Washington times., 1930-11-18
PEPC0'S RATE
EARNINGS
RAPED
cRy Heads Hint Abrcuati0ll
Of Consent Degree BY Which
Power Profits Accumulate

With the Potouac Electric
Power Company preparing i ueu
schedule Of rates for approval ot
the Public Utilities Commission,
it was learned today that District
authorities are discussing pos.
sible abbrogation Of the consent
decree under which d minimum
rate of return Of the company Ii
definitely fixed.
. Under the consent decree. en-.
tered into in 1924, the company
has received more than Ss 800 900
above the minimum retlirn fixed
by. the court, and aiIt aties
have now about reached the con-
clusion that the people of the
city should now receive In some
form or other the benefits pf
this exces pr0fit-or at least,
that the excess should be nlateri.
ally reduced in the future.
LOp-Sided Affair
It 1t pointed out that the de
cree Is rather e lop-Sided affair,
in that II guafantees that the
earnings of the comp ny shall not
fall below a certain figure, while
it does not fix any maximum rats
which the company would be al
lowed to earn on its valuation.
The decree does provide an In
direct return to the public Of one
half Of the excess earnings in any.
given year, the return to be made
by applying half of the excess
earnings Of the year toward reduc-
ton Of power rates for the sue
ceeding year. -.44 -.
The decree guarantees to the
company the right to earn T1a
.-er cent on it's -aluatioll. Should
its earnings fall below this figure
over any period Of years, the COM
pany would be allowed to epplY
to the public utilities commission.
for an increase in rates which
would allow it to make up the
deficit in earnings thus created.
The Public Pays
In other words, the company
gets a full lift to the 7t2 per cent
figure If it should fall below it,
while, when it runs above this
figure, the public only gets back
half of its excess earnings.
1t has been proposed that the
decree should also contain a
maximum figure of earnings al
lowable to the company, say 8
per cent. and that all earnings
above this figure should be re-
turned to the public in the form
of reduced rate charges the sue
ceeding year.
Naturally, the company. which
is earning handsome dividends
under the decree is averse to any
tampering with the ruling of the
court, and is expected to oppose
vigorously any attempt which
may be made to obtain more
liberal treatment for consumers.
The decree, which was entered
by Justice Wendell p. Stafford at
the termination of: a bitter
valuation proceedings. set the COM
pany's valuation at $50. 600, 900, q
figure which at that time was held
by representatives of the people to
be very high.
$4S, zoo, 900 Valuation
With additions and betterments
allowed since the decree was en-
tered about five years ago, the
company now has q plant and
equipment valuation Of approx.
mately $49, 900 900.
This $49. 200, 900 is held now to
be excessive by many who have
studied the utility field. They as
Sert that the valuation now
should be only slightly more than
$50, 900 600, just about the figure
set by the courts in 1924.
It is asserted by some that II
the Public Utilities Commission
were now to undertake re.
valuation of the conpany's prop
erty. it would be found to be close
tn the lnvyn1s fion1ra