Evening star., 1943-02-28
u. 5. Agencies Battle
To Revise Pepco
Rates Opens tuesday
Autonomy Of PUG Seen
Involved in Struggle
Over Sliding Scale Plan
BY DON S. WARREN.

BY DON S. WARREN.
Powerful agencies OF the Fed
eral Government will engage the
Potomac Electric Power Co. Tues
day in battle over the sliding
scale plan for annual adjustment
Of power rates that may result in
decisions Of permanent influence
on utility regulation as we'll a. fu-
ture rates.
The scene will be the board room
of the District Building, where the
Public Utilities Commission will
open hearings on the l943 power
rates.
The autonomy Of the PUG itself is
involved. some observers declare,
since Federal spokesmen, in dc
manding cheaper rates for the
United States and other customers
have threatened public ownership,
use of war powers or other rem
edies" If fair and reasonable" rates
are not otherwise achieved.
Immediate Issue.
The immediate issue is the sliding
scale plan which generally was re-
garded in prewar days by consumers,
the company and the commission, as
the best, quickest and cheapest
method vet devised for utility rate
fixing. The stress of war conditions.
however, brought demands from
some quarters for drastic revision
Of basic principles if, indeed, the
plan was to be retained at all
Treasury Procurement spokesmen
frankly have asked the PUG to alb
rogate the agreement Spokesman
for both Price Administrator Prem
tlss Brown and Sterilization Direc
or James F. Byrnes demand drastic
changes in accounting of operating
expenses, including, in other things,
taxes and depreciation fund accru-.
ais, paid ultimately by the customers
Depending on what order finally is
issued by the PUG, it is possible that
me issues may be swept into Con-
cress as we'll as the courts, for un-
der the La Toilette anti-merger law.
creating the District Public Utilities
Commission, the agency is required
o report promptly to the District
Committees Of Congress any
changes in valua ton OF Washington
utilities
Point to Reductions.
On the eve Of the battle. propo-
nents of the sliding scale point to
the millions of dollars in power rate
reductions which have resulted since
the plan was instituted. under a
court consent decree. at the end Of
1924, effective beginning with jan
uary, 1925.
Against such arguments will be
thrown the declarations of Govern
ment spokesmen that regardless of
how much savings have resulted in
the past. prevailing rates are un-
reasonable the owners Of the power
company are reaping excessive earn
lngs, depreciation charges for re-
placement of properties worn out in
service are improper, the company
must bear the full weight of the
extra taxes levied for prosecution
OF the war and not pass them along
to the consumers, and regardless of
the sliding scale or any other plan
the PUG has the duty to fix fair
and reasonable rates
The company already has taken
issue with many suggestions for
revision Of what it insists are funda-
mental principles in the plan, de-
claring the changes would consti-
tute valuation proceedings. If
this Is to be the case, they say, the
company must be given months to
prepare its case Therefore the
company indicates the issue would
result IN protracted proceedings,
possibly winding up in the courts,
with rate changes consequently be-
ing deferred. Government officials
have argued consideration of even
fundamental changes need not re-
quire long time.
Litigation Up to 1924.
Back in 1924. the PUG and the
company had been engaged for years
in litigation over rates. The diff
ference between lower rates ordered
by the PUG and those claimed by
the company was impounded This
fund had grown to some $4,000 900
The issue, which had been carried
to the Supreme Court. was settled.
with the approval OF District Court,
by adoption of formula under
which rates were to be adjusted up
ward or downward each year on the
basis Of the profits or losses or in
sufficient returns in the preceding
year. as measured against the COM
panys rate base or value. The i'm
pounded fund was divided equally
between the company and the con-
sumers.
According to figures made avail
able by the company. rate reduc-
tions totaline s8,842551 resulted
average annual reduction of S49l,
252.
Proponents of the plan, moreover,
say the actual total savings go into
near astronomical figures, by cal
culating the annual savings on a
cumulative basis. In other words.
they point out that while the first
wears reduction was S762.352 this
was not the end of the 1925 saving
since its effect was carried through
all succeeding years. The same,
they explain. would be true as to
the second reduction Of s352.164.
applying not only to 1926, but also
to all succeeding years. and so on.
Many studies have been made in
the past to show comparisons be-
Ween rates of power concerns over