Evening star., 1941-01-28
Electricity Rate
Cut 10 Include
Households
Utilities Commission
Orders New Schedules
For $337,000 Fund

1ne TASK OF appOrtlOnlng 1851 ,UOU
rate reduction among customers of
the Potomac Electric Power Co., was
still unfinished today as experts Of
the power firm began preparation
Of new revised rate schedules in ac-
cordance with instructions issued by
the Public Utilities Commission.
The commission called for the new
schedules late yesterday after the
company had submitted suggested
new rates that would have applied
virtually the entire reduction to
commercial consumers Chairman
Riley E. Elgen of the commission
directed that the percentage of cur
rent used by each class of consumers
be used as basis for division of
the savings.
The utility company and the COM
mission have been at odds since the
opening of the public hearing to
consider rate adjustments. At the
outset, they disagreed over the sum
to be made available for a rate cut.
When the firm submitted its pro-
posed new rates yesterday, another
wrinkle appeared, precipitating a
long debate.
Computation Factor Changed.
The controversy centered about
new application of the sliding scale
formula proposed by the company.
Up until last year, the Utilities Com
mission had figured the rate OF re-
duction on the revenues for the pre-
ceding calendar year, but had
ordered the new rates to become
effective February l. No correction
was made in the revenue figures for
each January to reflect the fact that
the reduced rates had not been IN
effect that month.
Last year the commission changed
its computation by adding to the
operating revenues available fcr
rate revision the amounts con-
sumers would have saved If the re-
duction ordered in 1910 rates had
dated from January l instead of
February l. So, in drawing up its
proposed new rate schedule this
year the power company decided to
take into account the change, Which
spokesmen said had worked to their
disadvantage.
Company officials calculated a
drop of s42 900 in 1910 revenues by
this change and figured that amount
in as part of this years reduction.
The practical effect of this pro-
cedure, in the opinion of Chairman
Elgen and Corporation Counsel
Richmond B. Keech, would be to
reduce the actual 1941 saving to
District consumers from $337,000 to
$295 900. Company officials in
sisted they were merely following
the commissions rate order of last
year.
After debating the matter for more
than two hours, the commission
asked the company to submit re-
vised new schedules that will reflect
the entire amount-$337 ,000-which
the commission had decided is avail
able for consumer rate reductions.
S575,0O0 Cut Last Year.
Chairman Elgen said the new rate
schedules should apportion the re-
duction over all schedules by the
percentage of kilowatt hours each
bore to the total consumption. Last
year domestic consumers received
about q per cent of a s575,OO rate
cut, while the remainder was ap-
piled to commercial customers.
At the opening of yesterdays ses-
sion William K. Laws, counsel for
the power firm, noted on the record
several exceptions by the company
to the findings and decisions of the
commission and asserted the firm
reserves the right to take such ac-
ton as it may be advised to protect
Its interests"
He protested there was no justifica-
tion shown for the commissions
exclusion of an allowance for ex-
penses in connection with sales of
preferred stock. He also protested
disallowance of amounts heretofore
charged to maintenance for retire.
ments of property, and the dis
allowance as operating expenses of
contributions to the Greater Ma
tional Capital Committee of the
Board of Trade, the Cherry Blossom
Festival and similar contributions.
Income Tax Enters Picture.
Mr.. Laws said it was equally
difficult for the company to COM
prehend" the adjustment made by
the commission in income tax ac-
cruals for 1888 and 1899. He said
depreciation had been computed at
per cent in determining the
amount to reserve for this contingent
liability. The commission, on the
other hand, had figured depreciation
at rate of 35 per cent because the
firm has asked the Bureau. of
Internal Revenue for that allowance.
However, Mr.. Laws insisted that
there was no evidence to lead the
commission to believe that the
Internal Revenue Bureau will grant
allowance at the 3.5 per cent rate.