Evening star., 1942-08-14
ID. {. Gas Rate
Boost Sought
By September
Officials Report
Deficiency Under
Sliding Scale Plon

SSy
Sliding Scale Plon
Prospects for an increase of $323,-
488 in the consumer rates OF the
Washington Gas Light Co., effective
September l, were raised today at
a pre- -hearing conference of COM
pAny ofIicials with the Public Utili-
ties Commission, when commission
figures showed the company in the
past year had q deficiency in return
under its sliding scale plan.
Indications that there will be =
hard fight over q hike In gas COM
pany rates, however, were given
when Commission Chairman Greg
ory Hankin raised question as to
whether the company rate base, or
valuation, might be reduced by ST.
055 900, by using original costs to
determine land values.
OPA Action Possible.
There was also an indication that
the Once of Price Administration
might be brought into the picture, on
the thought that the OPA might
not permit q boost In rates to gas
users.
At the invitation of Chairman
Hankin, Harry R. Booth. utilities
counsel for the OPA, attended the
conference as an observer and at
one point he suggested that since
this was the first time the sliding
scale would operate during wartime,
any question OF rate changes might
be considered in the light OF the
program Of the Federal Government
for price control"
He suggested that the OPA be
given opportunity to consider 4
question of changes In consumer
rates.
Formal Hearing Tuesday.
The formal hearing on annual Ad-
justment Of consumer rates Of the
company, under its sliding scale
plan adopted in 1885, is scheduled
for 10 am. Tuesday.
Today's conference was intended
to limit issues and testimony at next
weeks hearing.
There has been an annual rate re-
duction under this plan each year
since 1885 until last year, when the
basic" rate of return to the COM
pany on its valuation fell below So
per cent, but not sufficiently to war
rant q rate boost this past year.
Figures presented to the commits
sion today by its staff showed that
for the test year ending June 80,
last, the return earned on 4 valua-
ton Of $2S, ,066, ,041 was 5.1l per cent.
Whereas the return At the basic
rate Of 6h per cent would have left
tl,825, ,722 with the company, the f1g-
ures showed there was deficiency
in return OF $685., ,1e6.
Percentage Return.
Under the sliding scale plan. II
the percentage Of return is less than
Sh per cent, the amount available
for increase of rates would be Ave-
sixths OF the difference between the
net amount available for return and
the 81 per cent basic rate Of re-
turn.
Therefore, the figures showed the
company was entitled to rate In
crease amounting to $323, ,4SS, as
Stunning the commission approves q
rate base OF $2S, ,0ss, ,o41 and does moi
find reason to make any changes In
the financial statistics.
Mr.. Hankin brought out that the
valuation agreed upon in 1885 by
the commission and the company
placed land values at $1,055, ,00C
more than the total original cost
Of land purchases, which dated bach
In some cases to 1848. The sug-
gestion was that the commission
might decide to decrease the rate
base by $1,055,O0 or less, which
would constitute Fundamental
change from the original sliding
scale agreement.
"Backlog" Prohibited.
In response to the suggestion thai
the -OPA program might upset pros.
poets for 4 rate boost, E. Barrett
Prettyman, gas company counsel
argued that due TO the sliding -scalt
arrangement the company was II
= unique situation-that eachs yea
since 1888, until last year, ther'
had been rate reductions and tina
the company had not been permitted
to build up cash "backlogs."
As a result, he said, the sliding
scale arrangement constituted tn
chief resource of the company II
maintain its credit standing. HI
added that the company had nj
holding company to which to tur1
for needed funds.
Chairman Hankin at this poin
suggested that the debate was be
. yond the scope OF the pre-hearin
proceedings.