Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-25
BRIEF IN GAS Rate |
CASE IS SUBMITTED
Arlington Counsel Contends
Evidence Failed to Support
Present Charges.
BY LESTER n. INSKEEP.
Stan Correspondent of The Star


stafr Correspondent of The Star
ARLINGTON COUNTY COURT
HOUSE, Va, May 25.-In a brief filed
Saturday with the State Corporation
Commission by G. o. BaSham, special
counsel for Arlington County in the gas
rate case, the Rosslyn Gas Co. Is al
legged to have failed to overcome evil
dence offered by the complainant show
ing that the present rates in Arlington
County are unreaSonably high. TeSti-
mony in the case was heard by the
commission April and 10.
The rate under attack Is 81 so per
thousand cubic feet for the first $500
feet of gas consumed. 1t Is held by the
county that this rate should not be
more than $115. The rate of 90 cents
per thousand cubic feet for consump-
ton over $500 feet and the 65-cent
house-heating rate are not under attack
by the county.
Must Be on Fair Value.
The brief points out that rate must
be based upon the fair value OF the gas
company. determined in accordance
with the United States Supreme Courts
decision in the Smyth VS.. AmeS case,
which holds that the company is en-
titled to fair return upon its fair value
and that the public should p2y no more
than the services are reasonably worth
Following this rule, complainant in
PRODUCED evidence purporting to show
the original cost, reproduction cost new,
and cost of reproduction, less depre-
citation. Of the gas company as OF 1880.
From these costs fair value of $4,000
Is ohkained.
The brief next develops a rate of
$1l8 per thousand cubic feet, based
upon the reasonable cost of gas pur-
chased. distribution cost, including taxes,
depreciation, etc., and fair return on
the value for rate-making purposes.
It Is commended that the data support
ing the rate is derived chiefly from the
defendants estimates and annual re-
ports.
Defendant Is Challenged.
The defendant Is challenged to point
20 any evidence introduced by it relating
to the fair value of its property.
A rate of $1.15 is asked for the future
because of the introduction of natural
gas into the Arlington County supply
at a rate lower than the cost of manu-
featuring artificial gas, the $1.l8 rate
having been arrived at on figures re-
lating only to artificial gas.
It is pointed out that gas is retailed
by the Washington company to COM
munities in Maryland and to Alexandria
al IdSCS "a S1sSO S4s4OJ ACoRCNbANCAy'
To defendants contsntion that these
lower rates are based upon higher con-
sumption, the brief claims that the
higher consumption results from the
lower rate and that the lower con-
sumption in Arlington County Is due to
the higher rate.
Substantially lower connection charges
are requested, which are justified. ac-
cording to the brief, by prevailing prices
Of labor and material.
The testimony of G. A. G. Wood,
president Of the Washington and Ross
lyn Gas companies is characterized as
generalities, affording no basis for a
finding of fair value.
Comparison Held Not Significant.
The alleged increased consumption in
February, 1881, over the average
for 1880, relied upon by Wood to
show the reasonableness CT the
present rate, is held not to be
significant for the reason that the
consumption in a cold Winter month
such as February is not typical Of the
average annual consumption, consid-
ering the hot Summer months, when lit
tie cooking and no heating is required
The rate comparisons relied upon by
the defendant to support the present
rates are aSSailed as constituting EVIL
dence of only secondary importance. for
the reason that the factors upon which
q rate is based, such as cost of manu-
facture, distribution and efficiency Of
operation, are variable in different COM
munities.
The present deficit, referred to by
Wood, Is characterized as mythical"
bookkeeping deficit created solely by an
Unfortunately high wholesale rate Of IS
cents charged by the Washington COM
pany. It Is contended that the pur-
chase Of wholesale gas at rate of
DO cents, admitted to be reasonable by
defendants witness, would have netted
the defendant a handsome profit. The
brief points out that there is In fact
no deficit even at the 65-cent rate If
the calculations are based upon
proper Investment, excluding the cost
OF an abandoned plant and certain new
improvements upon which there has
been no opportunity to earn a return.
The defendant maintained at the
hearing that the District of Columbia
Utilities Commission would not APP
prove a wholesale rate lower than the
present rate Of 60 cents. The brief
points out that this is not a valid
reason for not reducing the retail rate,
contending that the District commits
sion has no jurisdiction over the whole
sale rate TO be charged to the RoSslyn
Gas Co.
The defendants brief is due In Rich
mond within Is days and the COM
plainant has five days after that with
in which to reply.
Basham Is associated In the case
with Comonwealth's Attorney William
c. Cloth and John C. Gall, counsel for
the Arlington County Civic Federation.
c. I. Kephart, special valuation engi-
neer for the county. appeared as prfn-
cipal witness at the hearing