Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-09
COMPROMISE PLAN
LOOMS IN ELECTRIC
POWER RATE FIGHT
PepCo Officials to Decide on
Conference With UtiIi-
ties Group.
PLAN MAY PREVENT
RESORT TO COURTS
Firms Profits Said to Have In
creased Under Present
Arrangement.

The question of compromising the
difference over electric rates between
the Public Utilities Commission and
the Potomac Electric Power Co. will be
discussed by the executive committee of
the board of directors of the corporation
at its meeting Wednesday. If the COM
mittse decides to enter into negotia-
tions looking to compromise. the com
pany will send representatives to dis
cuss the matter with the Public Utilities
Commission next Monday.
These were the decisions reached at
preliminary conversation between
Corporation Counsel William w. Bride
and S. r. Bowen, vice president and
counsel of the company, this morning
Mr. Bride is trying to bring about a
compromise between the commission
and the corporation, to prevent to re-
sort to court in battle to lower rates
by modification of the court decree
under which rats are now set.
Meeting on Wednesday.
The company has not yet decided
whether it will meet the commission
half way and enter the negotiations, or
whether 1t will stand on its rights under
the present decree and resist all efforts
to alter it. This is the question ex-
pected to be decided at the Wednes-
Committee. Assuming that the COM
pany decides to negotiate, then a series
of meetings, beginning Monday, will
be arranged with the commission, at
which the terms of the compromise will
be discussed
At all of the meetings held in dis
cussing the affair, Peoples Counsel
Richmond B. Keech is present. Mr..
Keech readily accepted the invitation
n lot dFyit
and believes that as a result of the
negotiation Washingtons electric rates
will be materially reduced.
Alter the conference today it was
learned that no definite terms were
discussed, except that each side asked
the other II there was anything tangi-
BILE in the way of an offer that could
be made, and each reply was in the
negative. What is expected to come
out OF the discussion, if successful is
some arrangement whereby Substan-
TALLY the same method as at present
Will be used in arriving at the rates
each year, but with the sliding scale"
arrangement changed so as to make
greater reductions possible in the COM
pany's prosperous years.
Present Arrangement Cited.
The present arrangement is that at
TIE emu OF eaCn year the cOmpanyS
excess profits above re per cent on an
agreed valuation are calculated. Then
the rates for the following year are
reduced by an amount designed to use
up one-half of this excess In practice,
however, the reductions, which are sup
posed to return to the consumers one
half of the excess profits, have never
done so.
Their effect has been to increase the
companys business to such an extent
that the company makes more, instead
of less, profit
This has been true without excep-
ton of every year during which the
present consent decree arrangement has
been in effect. In that time the rate has
been reduced from 10 cents to AZ cents
per kilowatt hour, but the company's
rate Of return has remained steadily
in the close neighborhood of 10 per cent.
This rate the commission, the last time
the rates were fixed, found was lex
cessive" and the present negotiations
are designed to make some new rate
making machinery whereby the COM
pany's return will be kept down and
more OF the excess profits made avail
able for rate reductions