Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-04
Another Rate Fight?

The Potomac Electric Power Co
leaves to the Public Utilities Commits
sion one alternative to embarking upon
an immediate rate reduction fight. AS
nobody knows where such fight would
END, 1t is we'll worth considering.
The company, in its letter to the Pub
lie Utilities Commission, undertakes to
show L decline in net revenues in Janu-
airy and February of 1881. as compared
to the same months OF the preceding
year, despite a reduction this year In
operating costs. Should the decline con-
tinue throughout the year the profits
for 1881 would be cut below the profits
for 1880, which the commission has ad-
Judged excessive. The alternative sug-
gcSted by the company is to wait until
the trend of business for this year shows
It's effect upon net profits.
II the commission does not choose
thus to delay its next steps, it has al
ready outlined what such steps may be.
One possibility is that the commission
might proceed on its own initiative TO
order a reduction in rates. This would
abrogate the consent decree, provided
the courts upheld the commissions
right to depart in this manner from
the terms Of the decree. But the COM
mission has no fight with the principle
OF adjusting rates through the instru-
mentality of the consent decree. 1t has
indicated no desire to scrap the decree.
And it should think a long time before
doing 1t.
Another possibility is that the COM
mission might prepare for future action
by ordering a revaluation of the power
company properties. The only drawback
to such a move is the fact that the
commission is already burdened with
the revaluation of the car lines. And
If such proceedings are arranged &C
cording to priority of need. the gas
company should certainly come next on
the list.
The third move is to go into court
to seek a modification of the consent
decree. The success Of this move would
depend at the outset upon the court S
opinion as to whether the decree could
be modified without the consent Of the
other party to the agreement, and after
arguments on the merits Of the COM
missions plea. If it could be, the
commission would have to convince the
court that the company's earnings above
certain margin of profit are in fact
excessive" and that greater rate re-
auctions than those resulting from the
consent decree are due the public.
II the natural ebb and flow Of bust
ness reduces the. company's profits this
year below a margin adjudged by the
commission as excessive, the commits
sion will not go into court with the
prospect of Immediately reducing rates
below what they now are. Its sole pur-
pose will be so to modify the decree that
IN future fat" years, sure to follow, a
more generous division Of excessive
| der the present oecree-will be made
with the public by further rate reduc-
lions.
If present earnings and rates are not
to be touched, the company should not
interpose further objections to gam
bling on its future prosperity. If il
does, and insists upon regarding the
existing terms OF the decree as fixed
and unalterable, the commission will be
left with no other recourse than to seek
those notifications that under certain
circumstances would be deemed desir-
able in the interest of the public.