Evening star., 1943-07-02
GovernInentSu6
Filed 10 Reduce
Pepco Rates !
- ~ " A0AH -
-
Two Actions Seek Cut
Of $2,000,0 900 Instead
Of Original $4,000

Power Co. to reduce it's electric
rates by more than $4,000, 900 an
nually instead of the $4,000 Or
dered April 26 by the Public Util-
tiles Commission.
Two appeals were filed from thu
PUG order in District Court. one W
the Offlce of Price Administration
and the Director of Economic Stabil.
ization and the other by the Procures
ment Division of the Treasury De.
partment. -
The Government, through thes4
agencies, had intervened earlier be!
fore the PUG, during its rate hear
ings. and unsuccessfully sought to
secure rate reduction of not less
than $4,000 600 annually. '|- =
The commissions order. however,
rejected the contentious of the Gov :
ernment agencies and ordered a rate
reduction in the amount of only
$4,000.
Recalls Previous Case. ''t.@
The petitions filed today mark the
second important case involving
utility rates in the District during
the last year.
In the first case, the OPA appealed
an order granting the Washington
Gas Light Co. a rate increase. Tbs
order, which gave the gas company
the increase was set aside in District
Court and now is before the Court
of Appeals. ~ y
In the appeal filed in the names
of Price Administrator Prentiss
Brown and Economic StabiliZationr
Director Fred M. Vinson, it u
stated: .'-rrs Z
The purpose of this proceeding
is to prevent the Potomac Electric
Power Co. from collecting rates and
charges which are excessive and un-
lawful, from unjustly and Illegally
enriching itself under the rates and
charges which have been deter
mined, fixed, and ordered by said
commission in its order of April 26,-
l943, and to require said company
to charge just and reasonable rates
with the period beginning with
March l, l943, as is required by the
provisions of said Public Utilities
Act, the sliding-scale arrangement,
the Government purpose to keep
down to the cost of living, and the
legal principles applicable to the de-
termination of said rates"
Cite Sterilization Plan.
This appeal also asserts that "if
the errors set forth in this petition
we're to go unrevieWed and uncor-
rected by the court, not only would
the application of the national
stabilization program to this COM
pa1y be defeated. but erroneous con-
ceptions of the obligations of public
utility companies and of the regu-
latory agencies having jurisdiction
over them might 60 unchallenger,
with the consequent result that the
stabilization program would be
placed in jeopardy throughout the
public utility rate field. and thus
| the public interest in stabilization.
which the appellants were designed
to represent, might be defeated"
The petition was filed in behalf
of the two agencies by Harry r.
Booth, OPA utilities counsel.
The position taken by the Public
Utilities Commission in the electric
light case. Mr. Booth explained, was
that it was bound by the narrow
provision of the sliding scale ar
rangement. The PUG was not free
to 60 into the issues, he said which
the Government agencies argued
must necessarily be examined if the
commission was to determine just
and reasonable rates.
Mr.. Booth pointed out further that
while the Commission stated that
it did exclude excess profit taxes and
allowed the company the benefit OF
only the l94l Revenue Act, the Gov
ernment contended that the COM
mission improperly calculated tbs
rate reduction even on that BASH
Among issues which the Govern
ment sought to have the commission
accept was the question of whether
the company is overcharging it's
customers approximately 100000 in
its charges in connection with its
operating expenses.
Rate Order Held capriciOus.' 81,
The petition filed in behalf of the
Procurement Division said the Pub!
lie Utilities Commission rate order
of April 26 was illegal, arbitrary
and capricious."
The commission. it was claimed,
arbitrarily and illegally made an
allowance for depreciation expense
in excess of the sum of $57l ,4349l."
THE commission failed to deter.
mine the annual depreciation ex-
pense of the company in compliance
with the provisions of its own
statute.
THE commission failed to deduct
accrued depreciation from the rate.
base.
The commission computed de-
probation expense upon nom
depreciable property" -~
Among other claims made In the
Treasury Departments petition were
that "the commission illegally al
lowed as operating expense the
amount OF $l,695,7l2 for Federal
income taxes"
It also claimed the commission
wrongly allowed s3.744,109 as a prop
er amount for working capital.
Request to Court.
The Treasury petition asked that
the court:
Reverse, annul and set aside said
order and determination of said
commission insofar as it permits the
company to collect rates in excess
of just and reasonable rates required
by the program of the Government
to keep down the cost of living, the
District Public Utilities Act. the
sliding scale arrangements and legal
principals applicable thereto"
The OPA and Economic Stabili-
zation Director petition in its pray
ers to the court urges 1t as follows:
(a) "Fix an early date for hear.
ing on the petition;
"(b) Reverse, annul and set aside
said order and determination Of the
commission insofar as it permits the
company to collect rates in excess
Of just and reasonable rates ,re.
ouired."