Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-17
Commission Cites That Com
pany Has Not Denied Re-
turns Are Excessive.
DECLARES COOPERATION
WOULD BE GOOD BUSINESS
Modified Consent Decree or Con-
tract Setting Up New Sliding
Scale Suggested.

The Public Utilities Commission to-
day laid all of its cards face up on
the table in its dispute with the Poto-
mac Electric Power Co. over reduction
Of power rates here. In a seven-page
letter delivered personally to Vice
President S. Russell Bowen of the COM
pany, the corporation was warned to
cooperate with the commission in re-
ductng rates or take the consequences.
The letter starts with a history Of
the high return earned by the corpor-
alton under the sliding scale set up
by the consent decree of Equity Court.
1t points out that the company has not
denied that its returns are excessive
and that regardless of any legal aspect
Of the matter 1t would be good business
for the company to cooperate with the
commission in some effort toward re-
ducing the rates.
The commission suggests either a
modification of the consent decree or
else ignoring the decree and entering
into q two-party contract, setting up
new sliding scale, which viii result in
reduced rates. It states that If the COM
pany viii not do either the commission
will not have the slightest hesitation
in taking whatever action seems best
to It, either to proceed to revalue the
properties Of the company at once or
to go to court over the protest Of the
company and ask the court to modify
the decree.
Decision Is Demanded.
The letter bids the company study
the question well and reach a decision
and report this decision to the COM
promises that it will Every promptly
decide" what action 1t will take.
The letter states N part:
"At the public hearing the latter
part of December, 1880, uncontradicted
evidence was placed before this COM
mission which showed clearly that rates
fixed in accordance with the sliding
scale yielded the company a net re-
turn of about 10 per cent upon the
agreed value Of its properties. It is
certain as anything can be that no
court would hold that rates which yield
a 10 per cent return to a utility such
as the Potomac Electric Power Co. are
conflscatory. It is likewise true that
there are numerous decisions in which
it has been held that rates which yield
a return of less than 10 per cent are
sufficiently compensatory"
The commission then outlines the
negotiations with the company looking
to a modification of the consent decree.
Peoples Counsel Richmond 3. Keech
against seeking a modification of the
decree which, it says, was handed
down after an agreement between the
htigantS, and If they jointly ask for
notifications OF it, it seems certain
that the court would hardly be in
duenced by the Intervention of any
other party who attempted to interpose
an objection or who chose to attack
the validity Of the decree which the
court had entered, or the courts juris-
diction."
Business Phase Discussed.
Addressing itself next to its position
that it would be good business for the
company to Cooperate with the COM
mission In securing rate reductions,
the letter states:
Some thought should be given to the
impression which will be created if
your company opposes in court q re-
quest made by the commission for
changes in the decree. Your company
will place itself in the position of op-
posing concession to its customers
which this commission, after careful
study, has announced it believes to be
fair and Just. You will, no doubt in
the opinions Of many Of your custom
erS, be fighting to prevent the lessening
of an unduly high rate of return by
insisting that you should be permitted
TO make about 10 per cent upon the
value OF your property, when it
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