Evening star., 1931-12-01
POWER RATE CUT
HEARING ORDERED
ASSTRATEGY COUP
Slash to 3.6 Cents Likely to
Be Asked of Electric
Firm.
MOVE TO HEAD OFF
COMPANY ACTION
Commission Advised Voluntary
Reduction Planned Under Con-
sent Decree Regulation.

The Potomac Electric Power Co. has
Deen notified by the Public Utilities
Commission Of its intention to hold q
publ chearing on reduction of Washing
TONS electric rates some time late In
January. Notice OF its intention was
sent yesterday.
Ten days must elapse before the day
Is set, and another 10 days after the
order setting the date. The commission
also ordered the company to have its
December report in by January 20, and
date "---'
The hearing was set, it was learned
tooay, as stragetic move to head of
counter actica by the power COMPANY
reported to the commission,
Inc commission was advised, it was
Salo, tnat the company planned to
make q reduction of rates of its own
accord, calculated on the consent de-
cree. ana put them in effect on jan
uary /. There is no references what
soever to this report in the notice ~
the company. but it Is understood that
Gne commission felt that by putting
tne company on notice that its rules
would be taken up in January. fhs
company would not make any reduction
OF its own.
From present indications the power
company will have earned during 1a31
approximately 81 SOC, 900 in excess of its
aA0WaDie return under the new sliding
scale fixed by the Public Utilities Corn
mission. Five-sixths of this sum or
approximately $l,250, 900, will be used
unoer the sliding scale for rate reduce
lions during 1882, and it is said this
VIII permit reduction Of the primary
rate from its present level Of AZ cents
per kuowatt hour to somewhere be-
tween 3.5 and 4 cents. Commission
statisticians say 3.6 cents IS the most
likely figure.
Scale Is Contested.
The sliding scale is now being liti-
gated in District Supreme Court, and
should the court decide against it and
return to the old system of figuring
rates under the consent decree, this
amount may be reduced by half mil
lion dollars.
Under the old system, the reduction
is calculated by taking one-half of the
company'S excess earnings above 71z
per cent on its fair value. Under the
sliding scale proposed by the commits
sion, five-sixths Of the excess over z
per cent Is used when the company
makes more than per cent in any
year. Indications are the return will be
approximately o.36 per cent on a rats
base Of approximately $4,000, 900.
The conduct Of rate hearings during
January represents q new departure,
since the previous practice was to ar
range the rates in December to take
effect on the first bills rendered by
the company In January. The practice
of holding q public hearing by itself
dates back only to last year, when the
commission held one on the insistence
of Peoples Counsel Richmond B. Keech
and William NICK. Clayton, chairman of
the Public Utilities Committee Of the
Federation Of Citizens Associations.
Earned 81 500, 900 in 1880.
In 1880 the company earned ST.
$50 900 in excess Of 712 per cent re-
turn on its valuation. Of this, one
half, or $3.50, 900, was used in reductions
in the 1881 rates. The effect of this
was to cut the primary rate from 46 to
40 cents per kilowatt hour, with &C
companying reductions In secondary
rates.
The hearings are to be held in Janu-
ary, SO as to alleviate the uncertainty
Of estimating the company's December
returns. December is one Of its heaviest
consumption months and the estimates
have frequently gone awry. In 1929
the return was underestimated by about
S150.o00 and in 1890 overestimated by
about $4,000.
The commission has until December
Is to file an answer in the District SUI
preme Court to the bill Of the power
company asking for an injunction to re-
strain it from putting its sliding scale
into effect. The company, however,
has pending o motion to expedite the
case, so as to get the litigation out Of
the way before decision on the rates.