Evening star., 1943-11-05
Gas Rate Cuts
Firm 5 Return,
PUC Admits
Honkin Says Gross
Should Be Reduced
By $1,200,000

The Public Utilities Commission s
demand that the Washington Gas
Light Co. draw up new rate sched-
ules to effect saving of $135 900 to
consumers during the next year was
based on a reduction from 6.5 to 5.75
per cent in the rate of return al
lowed the company, it was revealed
today.
The disclosure came when the gas
company submitted the. new sched-
ules to the commission. V. A. Nc
Elfresh, the commissions chief &C
countant, admitted under question:
ing by E. Barrett Prettyman, coun-
sci for the company, that the COM
missions rate-cut figure had oeen
arrived at by reducing the rate OF
return allowed the firm under the
sliding scale agreement for annual
adjustment of rates.
Under the sliding scale plan. which
has been in effect since 1885, the
primary or basic rate of return now
allowed is 65 per cent. During the
annual rate adjustment hearing this
year, however, the commission
broadened the scope of its inquiry
to include the question of whether
the rate of return should be reduced.
This is the first time the rate of re-
turn has been reduced below 6.5
per cent.
Reduction of 81 100000.
The new rate was set forth by
Gregory Hankin, member Of the
PUG, who issued a statement saying
that he believed the gross revenue
of the company should be reduced
by about ST 100000.
In submitting the new schedules,
the company made it clear it did not
accept the schedules based on the
s135 900 reduction or that it would
agree to any slash.
The PUG hearing today was for
the purpose of receiving the new
rate which will be incorporated, if
approved, into the commissions de-
clsion, which has not yet been
handed down.
Under the schedules submitted
the savings to consumers would be
divided as follows: Domestic service,
S1l5 .040; commercial and industrial
service, sl5,819; wholesale apart
ment house service, Sl,983, and sea-
sonal off-peak service, s54 Esti-
mating that the average consumer
uses about 1900 cubic feet of gas
per month, the saving would be
cents
S. S. Mason, rate engineer of the
gas company, said the schedule was
close to the 1912 rate. For do
mestic consumers using between 300
cubic feet per month to 1900 cubic
feet. there would be no reduction.
The saving for domestic con-
sumers ranges from l cent month
| for thoses using 1900 cubic feet q
month to sl97 to those using 100000
cubic feet a month.
In the case of commercial and
industrial users of gas, there would
be no reduction for those using
900 to l ,499 cubic feet per month
but savings would range from l
cent for users of 1900 cubic feet
per month to S194 for 100000
cubic feet per month.
Company Won't Agree.
Before MI Mason testified, Mr.
Prettyman told the commission that
he wished TO make it clear that
the company does not agree to the
rate cut, either to Sl35,000 or any
other sum" Mr.. Prettyman said
there was mo legal basis for the
slash, and that the schedules were
being submitted merely because of
the order of the PUG.
Mr.. Hankin said that in the opin-
ion he is filing today he would dem
onstrate that the rate of return of
SIS per cent allowed by the commits
sion on the company's undepreciated
rate base actually means allowing
the company a return of 70 per cent
on the property in its present con-
dition and that by permitting the
company to shift to the consumer all
! of its income taxes, including war
taxes, the commission is imposing on
the consumers an additional charge
of 2.8 per cent of the company s
property in its present condition.
In other words Mr.. Hankin as
serted, "the charge on the public is
not 5.75 per cent but 10 per cent"