Evening star., 1936-01-24
ENGINEER URGES
PEPCO RATE BASE
CUT OF $3,289,0lI)
Andrew Sangster Lays Plan
Before Utilities Commits
sion at Hearing.
PROPOSAL is BASED
ON PROPERTY VALUES
Calculations, if Approved, Will
Increase Reductions in Con-
sumers' Electric Rates.

A proposal that the rate base OF the
Potomac Electric Power Co. be re-
duced by $3,289,000 was laid before
the Public Utilities Commission today
by Andrew Sangster, consulting engi-
neer, when the commission resumed
its hearing on the reasonableness OF
the initial rate of return allowed the
company under it's sliding scale plan.
If the commission approves Sang
ster's calculations. the reductions in
consumer electric rates for this year
would be much greater than hereto
fore calculated by commission ac-
countants. Sangster was called to
the stand as a commission witness by
Hinman D. Folsom. special assistant
corporation counsel.
Cites Value Of Property.
Sangster's major testimony concerns
the values to be placed on properties
of the company which have been re-
tired from service since December 81 4,
1924, the date on which the sliding
scale plan went into effect under q
consent decree of District Supreme
Court, including retirements up to the
end Of 1884.
On the books of the company, and
also now on the books of the COM
mission. the value of these retirements
are figured at S6,053,547. These are
based on figures as to original cost"
Sangster makes use of 1924 prices
which he trended in order to arrive at
a formula which he used in calculating
what should be the value of properties
retired in the past 10 years.
Base Would Be Reduced.
He introduced charts to show that
the value of the retired properties
should be figured at s9.342.824 His
testimony was that this would place
the retirements on the basis of prin-
ciples included in the consent decree.
instead of merely using the company's S
Original cost" calculation
If his theory is adopted. the rate
base. figured by Commission Chief Ac-
countant Byers NICK. Bachman at
500, 400. 900, as Of December 81, 1895,
would be reduced by $3,289,O00. The
initial 7 per cent profit now allowed
under the sliding scale order therefor
would be figured against a smaller rate
base and would show a much greater
excess profit than now is figured on
the company's rate base calculation.
Hampered by Appropriation.
Congressional slashes in appropria-
tions for operation of the Public Util-
tiles Commission have made that
agency generally dependent on the
utilities as source of figures used in
rate ana valuation cases.
Testimony to this effect was pre-
sented to the commission yesterday by
Byars NICK Bachman, commission
chief accountant.
Engineer Commissioner Dan l. Sui
tan brought out the point by asking
Bachman if he had checked the ac-
curacy of the totals he had presented.
Yes" said Bachman, "the totals
are correct"
But did you check the figures you
used in these calculations?" Col. Sui
tan insisted.
mo. The basic figures we're taken
from reports submitted by the COM
pany."
Force Declared Inadequate.
Commission counsel then led Bach
man to declare it was physically i'm
possible to check the accuracy of COM
pany bookkeeping with the present
limited force of accountants on the
commissions staff.
This recalled that for the fiscal year
1885 Congress cut the commissions
appropriation by about SO per cent,
causing prompt reduction of the staff
from 81 to IA. The staff of account
ants had to be reduced from six to
two. While there was some increase
in the staff granted by Congress for
this year, the commission was not al
lowed to restore the accountants.
Bachman still has but one aide.
"The work of the extra accountants
in the past saved utility customers a
much greater sum than the cost OF
their salaries. one official said later.