Evening star., 1932-03-27
Brief Supports Change in
Power Rates From Method
in Consent Decree.
COMPROMISE SCHEDULE
REPLACED SLIDING SCALE
Reply to Company's Petition Up
holds Commissions Jurisdiction
and Reasonableness of Order.

The Public Utilities Commission yes
terday filed in District Supreme Court
a 95-page brief in support of its action
in changing the method of fixing elec-
trio rates for the District from the
method embodied in the consent decree
entered in that court in December,
1924, to the new sliding scale arrange
ment ordered into effect by the COM
mission last year. The Potomac Elec-
trio Power Co. appealed to the court
and the changed sliding scale has
never been put into effect. Electric
rates were reduced this year when the
commission adopted compromise set
of rates offered by the company, with
notifications.
When the company first took the
matter to court the commission moved
to dismiss their bill. Chief Justice
Alfred A. Wheat overruled the motion
and held that the commission must file
an answer meeting the merit of the
company's bill. In doing so, however,
he upheld the right of the commission
to continue its supervision over electric
rates, in spite of the entry of the con-
sent decree, and the case came to issue
on two opoSitions-whether the COM
mission had the Jurisdiction to enter
the order it did. setting up the new
sliding scale, and whether, granting
the jurisdiction, the order entered was
unreasonable.
Precedents Are Treated.
The brief, searching and painstak-
ing document, meets these issues by an
exhaustive treatment of legislative and
judicial precedents. A list of the cases
cited by the commission takes up four
long pages. The brief was prepared by
Assistant Corporation Counsel William
A. Roberts in collaboration with j. B.
Smith, special counsel, and was pre-
sented by them and by William W.
Bride, corporation counsel.
The brief first discusses the history
OF the consent decree, under which
rates were to be adjusted (and were
adjusted) annually so as to allow the
its agreed valuation Of $32, 500, 900,
plus net additions, undepreciated but
weighted, each year. If the return ex-
ceeded 7la per cent, then one-half of
the excess was to be used in reducing
rates the following year, the company
keeping all Of the excess. In practice,
however, the rate reductions never have
had their intended effect, and the COM
pany has never earned less than 8 per
cent, and in recent years never less
than 10 per cent on its valuation, which
has meanwhile grown to upwards of
$50 100000. The commission found as
fact that this return was excessive,
and of its own motion set up new
sliding scale, allowing the company q
return OFT per cent. If the earnings
were per cent, then one-half of the
excess is to be used as a rate reduc-
tion fund. If 9 per cent, then three
quarters of the excess. If more than
9 per cent, then flve-sixths Of the
excess.
The brief traces legislative control
over public utility rates back to the his
toric case Of Mum VS.. Illinois, in 1870,
and accounts for the transfer of the
jurisdiction from the legislatures, too
busy with other matters to be con-
stantly changing rates, to commissions
Of experts exercising the legislative con-
troll. This control, it says, Is not one
to be lightly bargained away, and the
courts have looked with disfavor upon
any effort of the legislatures to divest
themselves of the power by contracts.
In this connection the constitutional
limitation against impairment of con-
tracts by the State has not stood in the
way, because the legislative power of
regulation is looked upon as a latent
condition of the contracts entered into
with respect to rates between utilities
and municipalities or other agencies
acting under legislative grants Of power.
Has Legislative, Power.
"The establishment Of rates by con-
tract" the brief states, lis an affirma-
tive legislative act and Congress has not
vested the commission with legis-
lative power for this purpose. The
commission, as representative of Con-
gresS, remains vested with the duty and
is continuously required to enforce rea-
sonable rate regulations. The aftima-
tive duty to act excludes the capacity to
suspend 1t through contract"
The brief points out that rate-mak-
ing is legislative and not a judicial
matter, and that when the courts OF
the District sit as appellate bodies
over acts of the commission, they sit
as legislative and not as judicial bodies,
a point decided directly in Keller VS..
Potomac Electric Power Co., in the
Supreme Court of the United States.
IF the effect of a decree on an ap-
peal" it goes on, "were to permanent
ly establish In the courts exclusive and
original Jurisdiction over rates, there
would be imposed upon the court a
burden so great that it could do little
else. The result would be that the
commission in the course OF time
would be divested of practically all
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