Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-27
ASKED
IN SUIT BY PEPCO
Would Enioin Utilities Body
From Changing Consent
Decree.

The matter of Washington's electric
rates. which has stayed out of the
courts for six and a half years. found
its way back to them yesterday, when
the Potomac Electric Power Co. filed
a bill in Equity Court to restrain the
Public Utilities Commission from en-
forcing the terms of an order modifying
or changing the consent decree of the
same, court under which they had been
annually adjusted for six years.
The commissions order, adopted
June 8, was designed to affect the new
rates to be set in December for the
1892 calendar year, and probably would
mean lower rates than those available
under the consent decree.
The last time the electric rate uues-
ton was litigated, the litigation lasted
seven years, and went to the United
States Supreme Court inconclusively
before it was finally compromised by
the signing of the consent decree in
December, 1924, by former Justice w. P.
Stafford.
The bill contends the order Is illegal
Tor numerous reasons-among these
that 1t is indefinite, uncertain and
vague and that at the TIME it was
made any investigation of the rates
effective since January /, 1881, If other
wise proper, was premature. The bill
also held that the order was adopted
without any complaint or inquiry as to
any of the existing rates and without
finding of fact that the existing
rates we're unreasonable and without
any finding of fact as to the amount
OF rate base, earnings and operating
expenses Of the company.
The company states that It Is the
duty of the commission to construe the
a n
provisions, but that this was not done.
On the contrary, according to the COM
pany, the commissions order has mis-
construed, misapplied and violated the
purpose and content of the public utili-
ties act, and the order prescribes con-
fiscatory rates of return, independent
Of ana unrelated to any proceedings
properly before the commission.
Compromise on Valuation.
According to the consent decree, the
commission and the company agreed to
compromise valuation of $32 500 ,00C
on the corporations properties, and
each year the rates were adjusted sc
as to yield the corporation III pei
cent return on this value, plus net ad-
ditions, weighted but underpriced, to
date.
If the resulting return in any year
SnOuIQ exceed 1H2 per cent, ITen the
rates for the following year were to
be designed so as to recapture half OF
the excess earnings by way Of reduced
rates.
In actual practice, however. the rates
never brought the return down to tx
per cent. Each reduction brought the
company so much more business that
the return stayed steadily around 10
per cent. This, the commission held
was unreasonably high, so that early
this Summer after public hearings they
ordered q new sliding scale Of rates
to take the place of the scale In the
consent decree.
The new scale gives the company q Z
per cent return on the agreed valua-
ton, and IL the return exceeds this by
not more than per cent, then the rates
for the following year are to be adj
juSted so as to take up one-half of the
excess. If the earnings are between
and per cent. then three-quarters of
the excess is to be taken up, and II
the earnings are more than 8 per cent
then five-sixths of the excess Is to be
taken up.
There are also provisions for adjust
ing the rates in case the return should
fall below per cent.
The present rates on electricity are
AZ cents per kilowatt hour for most
domestic consumption, with lesser rates
In secondary and subsequent consump-
ton groups. At the time the consent
decree was put into effect the rates
were 10 cents per kilowatt hour.