Evening star., 1942-09-08
PUG Tells 0PA
Gas Rate Base
Must Stand
Flanagan Refuses
To Reopen Formula
In Boost Threut

by the District Public Utilities Com
mission it would not permit recon-
sideration of the basic elements" of
the sliding scale agreement for an
nual adjustment of Washington Gas
Light Co. rates in the current rate
case--in which consumer rate in
crease of $324,700 to $751; is in
volved.
The ruling, announced by James
H. Flanagan. PUG chairman, was
interpreted as greatly diminishing
possibilities that the OPA might be
able to forestall the threatened rate
boost. Chairman Flanagan, how
ever, made clear that the commits
sion had not reached any final con-
Illusions as to the facts and figures
in the case under the sliding scale
agreement.
Opposition to the PUG position
was registered by Harry R. Booth,
utilities counsel for the OPA, who
argued that it was not the intention
of the OPA to try a full valuation
and rate case in the proceedings
proceeding which would take
months-but rather that he was en-
deavoring to show the effects of a
rate boost in the light of the Gov
ernment's efforts for price control.
He added that the question was
whether there would be any undue
hardship on the company in case
the rate boost were not allowed.
Inquire Into Taxes.
This morning Mr.. Booth had
questioned whether the rate in
crease would result in excess profits
taxes for the gas company and it
was estimated that the firms Federal
income taxes for this year would
be increased $250,o00 to $500 900.
Mr. Booth maintained that only
normal Federal taxes should be
allowed as charges against company
operating expenses. which are
charged to the consumers.
During this debate Chairman
Flanagan suggested that some ar
rangement might be agreed on for
seperate accounting of any excess
profits taxes which might accrue
from a rate increase, and that
some arrangement might be made
for a refund to customers If the
situation so dictated.
Gregory Hankin, commission
member, interjected at one point
that he had not understood either
the PUG chairman,s proposal or
the answer given by Robert C.
Overs, company vice president and
finance officer. Mr.. Overs had said
the company would be willing to
make such study with the CO.
operation of the PUG staff.
Scope of Hearing Limited.
Mr.. Hankin supported Mr.. Booths
arguments on abnormal Federal
taxes, declaring that the sliding
scale arrangement "in no sense"
states that "all" taxes should enter
into rate determination.
Chairman Flanagan, in the COM
missions formal statement brought
cut that when Mr.. Booth was al
lowed to intervene in the rate ad-
Justment case it was on stipula-
tion that the intervention should
not have the effect of changing or
enlarging the issues, unless. express
ly agreed to by the commission. The
commission had given no such per-
mission, he said Questions pertain
ing to the basic elements of the
sliding scale plan, he said, already
bad been ruled beyond the scope of
the proceeding.
The chairman said that the de-
tailed valuation of property and
other investigatory work regarding
the company was done by the COM
mission before the sliding scale ar
rangement was adopted. He con-
tinued: ITO question a basic ele-
ment of the arrangement at this
time undoubtedly would result in
throwing open all other elements
OF the arrangement for reconsidera-
ton. This obviously would lead to
protracted negotiations and the
question as to whether another ar
rangement would be more advan-
tageous or less advantageous to the
consumer could not be settled within
a period OF months.
Bars Detailed Investigation.
1T was not the intention of the
commission to initiate such pro-
ceedings when it called these hear
ings for the purpose of conducting
Its usual annual investigation of
the rates and other conditions of
service OF the company under the
slldlng scale arrangement"
Mr., Flanagan announced the COM
mission will be glad" to have tes-
tlmony of the aims of the OPA, but
he continued: However. we do not
feel that the presentation of such
views requires that the OPA should
carry on detailed investigation into
the accounts of the gas company.
This already has been done by our
staff, which is competent and ex-
perienced.
1T is the duty of this commission
to determine whether the accounting
OF the company has been performed
IN accordance with the terms of the
sliding scale arrangement. We have
the further duty of determining that
items entering into the computa-
tions made under that arrange
ment are reasonable.
1t appears that the books of the
company have been properly kept
and that the necessary computa ations
have been correctly made and the
commission will be faced with the
question of whether, in view of the
national emergency, the rates and
charges for gas service should be in