Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-07
COURT ROW LOOMS
IF UTILITIES BOARD
PASSES RATE CUTS
Potomac Electric Power Co,
Seeks to Save Present
Schedules.
COMMISSION is READY
TO ENFORCE DECISIONS
Sliding Scale to Be Studied Mon
day as Means for Lowering Util-
ity's Return of 10 Per Cent.


erning the rates of the Potomac Elec-
trio Power Co. doomed yesterday as a
result of its decision to take up at its
regular meeting tomorrow the issuance
of tentative order abrogating the
decree and substituting modn1eo
"sliding scale" which would tend to re-
duce the existing rate Of AZ cents pei
kilowatt hour.
AS the proposed sliding scale" is
less favorable to the company, which
is now earning about 10 per cent on the
agreed value of its property, 1t was
expected its adoption would result I'M
Ynediatelv in the company ava1llng IT.
self of the right of appeal to the courts
to save the consent decree"
Whether the company would appeal
10 the courts or not. there Is no ques-
ton of any immediate reduction In
rates for electricity. hearing would
first be held, and it was said yesterday
there is hardly any likelihood OF a
hearing on the question before next
December.
At the same time it was disclosed
the Public Utilities Commission is ready
to consider a plan to be proposed by
the Washington Gas Light Co. for the
adjustment of overchargeS to consum-
ers due to high pressure, about which
Winter. 1t is probable that the COM
pany's plan will be submitted to the
commission tomorrow. Beyond con-
sideration of it, no other action Is con-
templated at this time.
First Plan Unacceptable.
Previously the Public Utilities Com
mission had ordered the company tc
submit a plan relative to such over
charges. This was done, but the COM
pany's plan proved unacceptable
Should the amended plan be available
tomorrow it will bring the question uL
again. with discussion as to the de-
STABILITY OF a public hearing.
TIE commission has long had this
in mind, but indications pointed yes
terday that no action would be taken
at this time A public hearing, it was
pointed out. would be confined solely tc
the question of overcharges due to
excess pressure methods and would not
involve any general reduction in gas
rates
In all probability such hearing on
overcharges would embody proposal
to penalize the company If it maintains
a pressure above the maximum allowed
by the commission. The commission
Is understood to have in mind some
plan of adjustment that would serve
automatically to protect the consumer
from such overcharges as occurred
last Winter.
A survey then ordered by the COM
mission indicated that the company, IN
order to keep pace with the rapid con-
sumption of gas, was exerting such high
pressure of distribution that pressure
for some consumers had gone up to
IA inches. The commission directed
the gas company to install additional
distributive mains so as to relieve the
pressure on certain principal mains
and effect more equitable distribution
of gas over the city. To help them
accomplish this the commission per-
mitted a maximum pressure OF 8
inches, whereas previously the max
imum was limited to inches.
With the question arising again and
the possibility of hearing to determine
adjustment of oVercharges for excess
pressure. the impression has been Gre
ated that the commission might restore
k the former maximum of inches. BY
4 that time, it is expected the gas COM
~pany will have taken the necessary pre-
cautions against conditions such as con-
Sumers experienced last Winter.
Return Held Too High.
The situation with respect to the
Potomac Electric Power Co., which may
come to a head tomorrow, grew out OF
the recent hearing on the question oil
changing the present sliding scale" oil
rates so as to bring about reduction
for the consumer and less return To the
company. At this hearing, William A.
Roberts, special assistant corporation
counsel, commended the power company
had exceeded a 71z per cent return by
company, despite business depression,
was earning enough to reduce rates still
further.
The present sliding scale, effective
since the consent decree" Of 1924, pro-
VideS that when Potomac Electrlc
Power Co. profits in any year are more
than the basic return of 712 per cent OF
the agreed valuation, half tae sum OF
excess profits is used as the basis OF rate
reduction for the following year. Unoer
this practice, the rate to consumers mas
been steadily reduced since the promul-
CATION of the decree, to a present rate
of AZ cents a kilowatt hour.
The modified scale which is now pro-
posed, approves 7 per cent instead OF
III per cent as the rate OF return on
basic valuation.
If the excess profits are more than
7 and less than 8 per cent, hall the
excess would be used as reouctlon
base. When the profits exceed ano
are less than 9 per cent, three-fourths
of the sum would be used. If excess
profits are more than 9 per cent OF
the assessed valuation then f1ve-siXths
would be the basis for rate reduction
the following year.
Application of such sliding scale
it. lis believed, would have tended 70
reduced rates to 3.5 cents per kilowatt
hour had it been in effect since 1871
Litigation Disliked.
The commission naturally is anxious
ia, avoid litigation which undoubtedly
would follow any action on It's part IN
approving a tentative order for this
proposed new sliding scale" OF rates
1t is confident that the evidence In
its possession as to the return enjoyed
by the Pepco would be accepted BY
the court as reasonable cause TO reduce
rates to the point desired.
If the company refuses to join the
commission and takes the matter into
court, it would be placed In the posi-
ton of opposing a concession 10 Tine
consumers which the commission, after
long and careful consideration, believes
to be fair and just. The company Is
now making return of about 10 pei
cent, it was said, when other public
utilities are making less and are ap-
parently satisfied.
In a communication to the Potomac
Electric Power Co. on a previous occa-
sion in connection with its suggestions
to modify the present Sliding scale,
the commission said it was well aware
that such action on its part might lead
- iitiOati0n and IL had distinctly