Evening star., 1939-04-16
Gas Companies
Merger Hearing
Opens Monday
Utilities Commission
To Study Expansion
Of Use of 'NoturoI'
BY DON s. WARREN.


Possibilities Of further dependence
on use OF natural gas in utility serv-
ice for Greater Washington will be
explored by the Public Utilities
Commission at public hearings, to
begin tomorrow, on a proposal that
the Washington Gas Light Co. pur-
chase the Alexandria and Hyatts-
vile gas concerns.
The question of whether 1t might
be wise to dispense with manu-
featuring Of gas by one or both Of
the suburban concerns was raised
by the commission in its call for
the hearing because the Hyattsville
concern uses about q 30 per cent
mixture OF natural gas with its
manufactured product, just as the
Washington company.
Control of the two suburban con-
Germs, as we'll as the Washington
company, is held by the Washing
ton Suburban Co.'S, Massachu-
sets cOmmon-law trust, which
represents the Chase National Bank
and affiliated financial interests.
The trust is subject to the Holding
Company Act of 1885. and has
filed proposals with the Securities
and Exchange Commission for sale
of its holdings in the Washington
company to ''the public" No action
yet has been taken on this plea.
Two Previous Moves.
The Washington company has
made two previous moves to buy
from its parent trust the two sub
urban concerns. The merger idea
dates back to 1886. The first pro-
posal was to pay s1,375 900 for the
suburban concerns, but this was re-
jected by the District Public Utli-
ties Commission on the ground that
the price was too high and not in
public interest.
Later, a second proposal called for
the payment of S1,275 900, but this
was withdrawn when there were in
dications of adverse action. The
latest proposal is for payment OF
a price e.tilnated at some $780,
900, roughly gauged as the value of
issuance of convertible As per cent
preferred stock in the Washing
ton company.
The ownership trust has filed
petition with the commission asking
that it be permitted to intervene in
the case because of its interest in
the three companies. It owns rough
ly "a per cent of the common stock
of the Washington concern.
The commission staff has been IN
vestigating the economic circum-
stances of the suburban concerns for
some weeks. Commission officials
said they would have to determine
1rst if wisdom dictated the merger
of the three operating companies
and that the problem then would be
at what prices and under what con-
ditions.
Say Business Is Better.
Business of the two suburban con-
Germs, according to unofficial reports.
has been better recently than in
earlier years, but only the Hyatts-
vile company has been paying divi-
dends. Some officials said the COM
mission would be asked to consider,
also, the possibilities of increased
service to suburban areas if the
Washington company takes over the
outlying plants, and the effect this
might have on operating expenses
Of the Washington concern.
The Washington company and
the Hyattsville concern both buy
natural gas from West Virginia.
The price to the Washington com.
pany figures out at about IS cents
per 1000 cubic feet, considering
various demand charges and specific
rates for gas used for all purposes.
The overall cost of production and
maintenance of the local gas works
for manufacturing the fuel, on the
other hand, now Is about 26 cents
for the mixed product, a cost that
has been reduced considerably in
the last 10 years.
An important element In the situ-
alton is the fact that natural gas
has about three times the heating
value of manufactured gas, accord
ing to District experts. The natural
gas has quality of 1,l66 British
thermal units per 1000 cubic feet.
whereas manufactured gas has
about 383 British thermal units. The
District commission requires that
the mixed product of the Washing
ton company have quality of COL
British thermal units.
Longer Life Is Predicted.
Estimates of how long the West
Virginia gas wells will last have
varied in recent years. Early, rather
pessimistic reports have been sue
ceeded by predictions of longer life.
Measured against these estimates
will be the value and the remaining
"life" of the present gas manufac-
turing plants in the District and the
two suburban points.
The Hyattsville company has a
manufacturing plant. The Alexan-
dria company buys its supply from
the Washington company in the
"of peak" season, from March Is
to November Is. but manufactures