Evening star., 1942-08-19
Utilities Board
Won Consider
GasCo. Value
Hunkin Is OverruIed
In Move to Reduce
Sliding Scale Base
BY DON S. WARREN.

pubic nearing on annual ADJUST
ment of consumer rates of the
Washington Gas Light Co., pro-
posal by Mr.. Hankin that the COM
pany's 1885 rate base be reduced by
$l,o55. 900 by following a different
method of land valuation.
The decision was made by Com
missioners James H. Flanagan and
Charles w. Kutz, who granted a
motion made near the outset of the
hearing yesterday by E. Barrett
Prettyman, company counsel. Mr..
Flanagan, who announced the de-
cision, said the motion had been
granted on the ground that the
question raised was beyond the
scope of the present hearing
Door Open for Investigation.
Presumably, the wording of this
decision left the door open for the
commission, If it so elects, to order
an investigation and a later hear
ing on the issue raised by Mr.. Han
kin. 1t appeared also that the COM
fundamental change in the COM
pany's sliding scale arrangement
should not be considered in the
present proceeding because the
commission, in its rate hearing or
der issued last March 20, had not
notified the company or the public
that it proposed to consider this
question at the present hearing.
Commission experts said that
under the sliding scale plan the
elimination of an item of 81 ,055 900
from the rate base would have re-
duced the company's deficiency in
earnings during the past test year
(ended June 30) by about $55, 5000
According to financial report
supplied the commission by its staff
the company is entitled to a rate
increase. beginning September l..
amounting to $323,488, assuming
that the commission did not make
any major changes in charges to
operating expenses or fundamental
changes in the sliding scale ar
rangement.
Hankin Dissents From Decision.
Mr.. Hankin, who is serving his
last weeks as chairman of the reg
ulatory body. by reason of the ac-
tion OF Col Kutz and Mr.. Flanagan
in voting to deprive him of the
craftsmanship, noted his dissent
from the majority ruling and an
nounced that he would cite author
tiles in formal opinion which he
would write.
The disputed item of $1055 900
represents the difference of the ap-
praised value placed by the COM
mission in 1885 when the gas
company sliding-scale plan was
adopteO on land purchases of the
company and the original cost paid
by the company for the purchase of
land some Of which dated from 1848.
Mr.. Hankin insisted that the pres
ent hearing was in accord with the
sliding-scale plan to determine what
should be the rates charged the
consumer in the coming year, and
he argued that the commission S
decision would affect rates to be
paid by the consumers, and there
fore he thought the land item ques-
ton must necessarily be a part of
the hearing. He added that there
was subsidiary question as to
whether it was proper for the COM
mission to examine into the rate
base fixed by an earlier commission
in 1885. He insisted that it was
proper.
Subject to Modification
The commission chairman sale
the PUG in adopting the sliding
scale plan in 1880 had been careful
to state the limits of its powers in
accepting the plan and had noted
that an administrative body canno
divest itself by legal jurisdiction
and he argued that the commission
at all times had the duty to estab-
lish reasonable rates. He added
that commission in one year can.
not "fetter" a commission in some
later year and insisted that the
sliding scale arrangement alway.
was subject to modification in both
substance and form.
Mr.. Hankin referred to rulings bl
the United States Supreme Court
in support of his contentious. In
former years, he argued, there hao
been an impression that it was a
constitutional necessity for utility
regulatory bodies to establish a
valuation or rate base rejecting
the present" value of the properties
of the companies, no matter what
had been the original cost. More
recently, he continued. the Supreme
Court has given definite indication
that 1t does not make that require
ment and that in one notable case
on the point, while it did not say
that original cost must be the basi
of utility rates, it had made clear
that utility commissions were not
required to follow the ''presen
value" theory.
Sees No Need For Long Hearing.
Mr.. Hankln, in disagreeing with
company counsel, declared it woulc
not be necessary that there be {
protracted hearing on his land value
question, since the company book.
were available and these showed The
original costs of the land purchases
Harry r. Booth, utilities counse
for the Office of Price Administra
ton, who was yesterday made {
party to the case as an intervenor
asked the commission whether tht
ruling on the Hankin question woule
mean that the OPA would be pre-
vented from offering evidence of it.
position that the commission shoult
consider the threatened boost il
consumer gas rates in the light O
the Governments efforts to preven
imitation. Mr.. Flanagan replied il
the, negative, explaining that th'
ruling applied only to the Pretty
man motion to strike from thi:
hearing the land item question.
Sales Manager Questioned.
The remainder of the morning
was devoted to examination OF An
drew J. Maloney, general sales man
ager of the company, in regard II
Mr.. Hankin's question as to whethe
MI or only a part of a $216,000 ex