Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-10
COURT FIGHT SEEN
ON CONSENT ED|CT;;
INJUNCTION LOOMS
Pepco Directors Expected to
Decide Action Against
Commission Order.
ATTEMPT TO PREVENT
RATE FIXING EXPECTED
New Sliding Scale Designed to Help
Consumers Meets Manufac-
turers' Disfavor.

The board OF directors of the Potomac
Electric Power Co., meeting this after
noon in regular session, are expected to
decide the course of action to be fol-
lowed with respect to the order of the
Public Utilities Commission modifying
the consent decree under which electric
rates are fixed. and reducing the COM
pany's basic return from 7l2 to per
cent.
While officials of the power company
declined TO predict the probable action
to be taken by the directors, 1t Is re-
garded as a certainty that an appeal
will be made to the courts to determine
the validity Of the order. AS the initial
step in the apparently impending legal
battle, the company, it was indicated.
may seek an injunction to prevent the
new sliding scale for fixing rates. con-
tanned in the order, from being put into
effect.
Indicated Court Fight.
Company officials at recent hearings
at which the sliding scale was con-
Sidered. gave every indication they
would fight in the courts any attempt
on the part of the commission TO
change the consent decree under which
the utility earned an average net re-
turn Of 10 per cent during each of the
years 1925-1930, inclusive. The new
sliding scale is less favorable to the
company and Is designed to give con-
SumerS larger share of the excess
profits, in the form of lower rates.
Under the original sliding scale, one
half OF the company's net earnings, in
excess OF ~ per cent, were applied as
q basis for rate reduction. The new
nrHRr cIlhcfitlIfoc 10 IF
return. One-half of the return in ex-
cess of per cent would be applied to
rate reduction If not more than per
cent Is earned. hree-fourths of the
excess profit would be applied toward
rate reduction in the event the re-
turns are between 8 and per cent, and
fve-sixths would be applied If the COM
pany earned in excess Of per cent.
Merely Modified Sliding Scale.
Harleigh H. Hartman, vice chairman
OF the commission, denied emphatically
that the commissions order had abro-
gated or nullified the consent decree
which also deals with depreciation and
other matters not involved in the order.
The order, he said. merely modified the
sliding scale adopted under paragraph
ID OF the public utilities act. by agree
ment between the commission and the
company. This agreement was incorpo-
rated in the consent decree.
The consent decree was the outgrowth
of a rate and valuation case carried to
the court by. the power company in
1924. Before either proceeding was de-
termined by the court, the company
and the commission reached an agree
ment by which rates would be fixed
to produce a varying rate Of return on
valuation agreed to for that purpose.
This made it unnecessary for the
court to go into final determination
of either the pending valuation or rate
case.
AS result the agreement between the
company and. the commission was put
in the form OF consent decree The
court. in this case, expressly stated that
1t was entering such decree in so far
as it had jurisdiction, subject to exist
ing statutory provisions.
The commission in its order readjust-
ing the sliding scale points out that it
acted under paragraph Is of the utilities
act, which, it contends. gave it author
1ty, to change the terms of any agree
ment established under that paragraph