Evening star., 1935-12-01
GAS COMPANIES
TO ASK CUT APPLY
TO ALL SERVICES
New Schedule viii Go to
Utilities Commission
Tomorrow.
CONSUMERS SAVING
ABOUT $780, 600 A YEAR
$21 ,000, 900 Valuation as Of June
and 61(a Per Cent Return
Basis Of Proposal.
BY JAMES e. CHINN.


The Washington and Georgetown
Gas Light Co.'S, it was learned last
night, are planning to recommend
to the Public Utilities Commission
that the proposed reduction in rates
be applied to all classes of service,
commercial as well as domestic.
The new schedule will be submit
ted to the commission when it begins
public hearings tomorrow at 10 am.
on the plan OF the companies to set
tie the ong-pending valuation case
by adopting the snding-scale method
Of making rate adjustments.
The reductions, which the COM
panies are willing to make, effective
as of December /, are calculated to
save consumers about $3.50, 900 a year.
Actually, the cut will amount to about
$3.50 900, because the plan would make
permanent the temporary 8E2 per
cent discount ordered by the COM
mission several years ago, which cut
approximately $500,000 annually OF
the gas bills Of District consumers.
$21,o00,0O0 Valuation.
The plan also is predicated on all
lowing the companies a valuation of
$2l 100000 as Of last June, and a 612
per cent return on that valuation.
Just how the additional reduction,
amounting to about per cent, would
be spread over the various rate sched-
ules has been a matter Of conjecture.
Even members Of the commission are
unaware Of its features.
Enough information has leaked out,
however, to reveal that the companies
desire to apply the reduction to all
schedules. The amount will vary, but
it is understood the greatest cuts will
be distributed among the larger do
mestic consumers-those who heat
their homes as well as cook and heat
water with gas. The principal re-
duction to this class will come
through elimination of the so-called
demand charge for gas used for heat
ing.
The proposal of the companies has
been indorsed by Corporation Colln-
sci z. Barrett Prettyman, Assistant
Corporation Counsel Hinman q, Fol.
som and Peoples Counsel William A.
Roberts.
Satisfactory to Roberts.
Roberts pointed out that the pro-
posal of the companies is In accord
ance with his basis for settlement and
a sliding scale arrangement, which
Is satisfactory to him as a representa-.
tive Of the consumers.
Prettyman and Folsom, both ex-
planned that the rate of return Of
61a per cent seemed to be reasonable
in connection with the siding-scale
arrangement.
"A sliding scale arrangement seems
greatly to be desired, since it places
a premium upon efficient management
and automatically permits the con-
sumers of gas to reap the benefit of
a proper portion of the increased earn
ings, which such increased efficiency
will bring" said Prettyman. "At the
same time it gives the officials of
the companies staple, fixed factors
upon which to exercise their judg-
ments, and their investors likewise
fixed quantities upon which to con-
template their investments. 1t avoids
periodical, expensive, long continued,
disturbing rate and valuation litiga-
ton"
The sliding-scale plan goes much
further and is much more detailed
than the one now governing rates Of
the Potomac Electric Power Co. Like
the power company plan, however.
it provides that the gas company
shall keep whatever excess earnings
it may receive, but it provides for
more rapid translation Of excess earn
ings into reducted rates.
Earnings and Rate.
If earnings are in excess Of 612 per
cent and less than 71a per cent.
one-half of the excess shall be avail
able for rate reductions. If the
earnings are ia per cent and less
than 81a per cent, a new element
is introduced into the computation.
Then rates shall be reduced by three
fourths of the earnings in excess Of
71a per cent. plus one-half Of ] per
cent of the rate base.
For example. If the companies
earned $1,000 in excess Of 71a per
cent return on a $2l 100000 valua-
ton, approximately s75o,000 would
represent the three-fourths excess
earnings available for reduced rates.
To this would be added about $1oS,-
900, which is one-half Of 1 per cent
of the rate base, bringing the total