Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-22
The Natural Gas Contract"

The statement by Mr.. A. E. Peirce
relating to various and sundry matters
concerning ownership Of the local gas
companies throws an interesting light
on the nature of the agreement by
which the washington companies buy
their natural gas.
AS far as there is evidence to the
contrary, this agreement must have
been one of those informal understand
ings that are not put in writing and
which are possible only because of the
implicit trust and confidence that pub
lie utility companies repose in each
other. 1t is fine example Of the purity
and honesty Of big business and should
serve as a lesson to all.
For some time the Public Utilities
Commission has been interested in OBJ
tanning copy Of the contract or agree
ment by which the Washington COM
panies buy their natural gas. But so
far there has been none available to
spread upon the public records. The
Public Utilities Commission has been
informed that there is none, and Mr..
PIERCE, in his statement, says that "a
definite natural gas contract has not
vet been worked out for the Washington
Gas Light Co., and so it has been billed
for natural gas at the same price paid
Maryland Gas Transmission Corpora
ton" plus q margin to cover expenses
Of maintaining and building the gas
line that brings the gas into Washing
ton from the Maryland Gas Transmits
sion Corporation.
And yet, while there has been no
definite contract worked out and while
none is therefore available for study
and analysis by the Public Utilities
Commission. the Maryland Gas Trans
mission Corporation, not being able to
supply gas ION the date set" paid
over the sum Of $4,000 as q penalty
to the local company, and this money
was in turn transmitted to the Cen
trail Public Service Corporation to be
applied against the cost Of the trans
mission line which 1t built for the local
company.
In the absence Of any contract, how
could there have been any date set?
And In the absence Of any contract,
who estimated the amount Of dam
ages for which the Maryland Gas Trans
mission Corporation became liable when
it failed to supply gas on the date
set? In these parlous times Is it
customary for such concerns as the
washington Gas Light Co. to enter
into an agreement for the purchase
Of natural gas in large quantities and
10 collect monetary penalties for fall
ure Of the other party to live up to
that agreement, and have nothing to
show for the agreement in writing?
What are the elements that enter into
the cost Of this natural gas? How are
they fixed, and by whom7 Certainly
there is an agreed price and certainly
there are fixed terms for its delivery
and certainly those prices and agree
ments are set down IN writing. Why
have they not been furnished? How
long does the Public Utilities Com
mission intend to remain in ignorance
Of the items for which local consumers
are being charged in their gas bills?
Mr.. PIERCE, president Of the Central
Public Service Corporation, owner OF
the beneficial interest in the Westfeld
Trust. in which "tl1e ultimate control
Of stock of the washington Gas Light
Co. les" tells the Washington public
that for the purposes Of "eTecting econ
omies in operation" the Washington
Gas Light Co. has awaited itself OF
the services Of various experts in the
employ OF the Central Public Service
Corporation, and these experts have
been paid for such services, turning
over "the sums so received to the Gen.
tral Public Service Corporation as re-
endorsement for their time which was
devoted to Washington matters" Which
would cost the gas consumers more
the failure Of the gas company TO ef-
feet economies in operation or the hire
Of the experts who effect them What
have been these economies in opera
ton" effected by the expensive experts
and have they been made 10 reduce gas
bills or to give the experts the Jobs
FOR which the Central Public Service
Corporation is paid2 How many Other
such costs are the gas consumers OF
Washington taxed Isr in their gas bills
II the gas company can pay for effect
ing these economies, what does tho
Public Utilities Commission propose tC
make 1t pay for violation Of gas-pres.
sure regulations2 Thus far 1t seems Il
have been the only one TO escape 6
penalty.