Evening star., 1932-06-25

ground that the gas companies earned
10 and 25 per cent in 1881, and that
their rate of earnings for the first
four months Of this year was 13.47 per
cent.
The 1881 rate Mr.. Clayton called
grossly unfair and radically unreason-
able" The 1882, rate he said leans
closely toward a species of, criminal
exaction and regulatory fraud upon
every patron Of the company In the
District of Columbia"
The earning rate of 1925 per cent
which MIR. Keech contends in today's
application was enjoyed by the gas
companies last year was based, his petit
ton explained, on a valuation of ap-
proximately S20, 10000 Admitting that
unfortunately" there is no true valu-
alton Of the companies"
Mr.. Keech used the figures of the
1914 valuation and added to them the
net additions and betterments without
depreciation. He pointed out that a
greater portion of the property making
up the estimate valuation went into
use during high prices, while the pres
ent trend is substantially downward"
$20.5O0,OO Extremely LIBERAL"
THE net of this" Mr.. Keech advised
the Utilities Commission, ''is that the
figure SIC, 100000 is an extremely liberal
one and any rate of return computed
thereon would be favorable to the gas
companies. Utilizing this method as a
base we find that for the year 1881
the companies realized a combined re-
turn of 1925 per cent" He added that
the companies earning In 1929 and
1880 was 8.5 per cent.
Mr.. Keech estimated that the COM
panies' return for 1882 will be approxi-
mately 10 per cent. This estimate was
based on anticipated business arrived at
by comparisons with comparable
periods of last year.
"A rate of approximately 10 per
cent" the application asserts. sis ex-
ceSSive when it is realized that the COM
panies enjoy a monopoly and the gas
industry possesses great potentialities
in this jurisdiction. 1t is useless to
really argue the reason for this con-
clusion, as this proposition was gone
into thoroughly at the time of the
proposed modification of the consent
decree, under which the rates for elec-
tricity were fixed
Continuing. Mr. Keech said In his
application that it is affirmatively held
that utility is not entitled TO a rate
Of return such as would be expected
from speculative venture, "but merely
to such rate of return as will permit
it to keep its credit intact"
Rates and Comparisons.
The application held that while II
may be argued that the gas rates IN
the District compare favorably to those
in any city Of comparable size, as a
matter of fact, courts have held that
rates prevailing in one jurisdiction are
not controlling as to those in another.
Mr.. Keech brought out that the courts
even hold that unless it can be shown
that conditions in one Jurisdiction
actually are comparable to those in
another, rates are not admissible.
Mr.. Keech, In his petition, said he
did not believe that any other city was
comparable to the District of Columbia.
While fully realizing the lack Of a
proper valuation Of the gas companies
and the necessity for such in order to
permit proper regulation" the peoples
counsel petition concludes. 1T is be-
lieved that sufficient basis exists to war
rant the commission in calling public
hearing with a view to reducing rates.
Likewise, the rates are excessive even
when adopting a liberal base, and so
excessive as not TO justify the commis-
sion in Withholding action pending a
determination Of the present valuation.
1T Is further believed that a reduc-
tion in rates will inure not only to the
benefit to the consuming public, but to
the utility as well
To this end, IL Is respectfully re-
quested that the commission call. at the
earliest practicable date, a hearing for
the purpose of reducing rates, believing
such hearing to be required by the
public utilities act of the District Of
Columbia and the mandate of the Su-
preme Court of the United States in
the case of Smith VS.. Illinois Bell Tele-
phone Co.