Evening star., 1936-01-27
|NEW.P.E.P. CO. DATA.
HOLD PROMISE Of
HEAVIER RATE CUT
Nearly $4,000, 900 May Be
Taken From Rate Base by
| Rehabilitation.
| AFFECTS PROPERTIES
| RETIRED IN 10 YEARS
Max c. Mason, Company Survey
Engineer, Submits voluminous
Study to Commission.
BY DON S. WARREN.

PROSPECTS of a heavier cut in con-
suner electric rates than has been
figured for this year on the basis
of the present rate base Of the Po-
tomac Electric Power Co. rose today
after testimony was submitted to
the Public Utilities Commission by
one of the company's own witnesses.
Max c. Mason, survey engineer Tor
the company, submitted a voluminous
study, which indicated nearly $2,-
0oo, 600 may be cut from the agreed
rate base Of the concern by = re-
calculation Of the value Of properties
retired from service In the last 10
years.
Commission accountants have f12.
ured that on the basis Of the present
rate base, the 1896 consumer rate
cut would total $s4,585. or half OF
the company profits in excess OF the
initial z per cent return allowed the
company under the sliding scale plan.
The commission was told that
neither the Mason study nor that pre-
viously presented by Andrew Sangster,
a commission witness, represented any
Official company as to what ADJUST
ment might be made in the rate base
against which the amount OF COM
pany profits are figured.
Mcclellan for Fairness.
Presentation OF Mason's study. how
ever, followed an opening statement
by President william Mcclellan Of
the power company, in which he de-
clared: "The company does not want
earnings on what it is not entitled to-"
DR.. Mcclellan 'evealed the commits
sion called on the company about q
year ago to make study OF the
value of items in the rate base on
December 81, 1924, when the sliding
scale plan was first adopted, and which
have been retired from service since
then. DR.. Mcclellan said there has
been talk of certain write offs for the
rate base. Decision. he said, was de-
ferred until the current hearings be-
fore the commission.
Emphasizing that the calculations
made by either Sangster or Mason
have not been taken before directors
Of the power company for approval or
disapproyal, he said they both were
regarded by the company Is merely
intended to throw light" on what
values should be given retired proper
ties In any reconsideration Of the rate
base.
DR.. Mcclellan also stressed that the
rate base used in the sliding scale
plan Is in no sense q valuation" as
they are set up in formal valuation
cases. He agreed, however. the rate
base adopted in the 1924 plan was In
the nature" Of value.
This recalled . declaration by VIII
liam NICK. Clayton, chairman Of the
Utilities Committee Of the Federation
Of Citizens Associations, at the outset
Of the hearings. that there exists no
real valuation of the company prop
critics.
Initial Rate Reduction.
Clayton and Peoples Counsel VIII
liam A. Roberts joined then in de-
manding that the initial rate Of
return allowed the company under its
sliding scale plan should be reduced
from Z to6 per cent on the agreed
rate base. The commission had called
the hearing to determine II the per-
mitted rate of return was too high.
Mason's study indicated that the
rate base could be adjusted downward
by $1,0o6,398 by his formula for re-
calculation of the values Of properties
retired in the last decade. The COM
mission witness, Sangster, last week
suggested that the rate base be re-
duced by $3.2S9, 900. The principal
difference Is that Sangster applied
his calculations to general costs, -
or overheads, whereas the company
expert did not.
Mason's study indicated he had
found the value of the plant, as Of
December, 81, 1894. to be $54,6s4, 900,
to which he added $9,560,302 for
general COSTS" and $1.86l. .6s4 for
materials, supplies and working
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