Evening star., 1944-02-28
Hearing Opens
On 1914 Power
Rate Schedules
FWA Seeks to Take
Part; SIiding-ScoIe
Method Attacked
By CAMBRIDGE CRIST.

the Potomac Electric Power Co.
opened today before the Public
Utilities Commission, the Federal
Works Agency asked for the right
to intervene and called on the COM
to abrogate the sliding
scale arrangement for rate making
in effect since 1925.
Alan Johnstone, general counsel
for the FWA, who presented the
petition for Intervention, declared
his agency was not seeking prefer
entail treatment and said the ap-
plication of the sliding scale under
present circumstances and condi-
tions is not in the public interest
and results in a serious injustice
to the consumers of electric energy
in the District Of Columbia"
Chairman James H. Flanagan Of
the PUG said the FWA petition
would be taken under advisement.
On Saturday the PUG granted a
similar motion for Intervention by
the Procurement Division of the
Treasury Department. which is rep
resented at the hearing by the
divisions general counsel, Thurman
Hill.
Operates 237 Buildings in Area.
Mr.. Johnstone told the commits
sion his agency believes it has
right to take part in the proceed
ings because the FWA, through the
Public Buildings Administration,
operates 237 buildings in the WASH
ington Metropolitan Area, paying an
annual bill for electric power Of
more than 100000.
OF this amount $2,130 900 went to
PEPCO and 100000 to Braddock
Electric Light and Power Co., Inc,
a subsidiary of PEPCO, during the
fiscal year 1943, he said.
In discussing the sliding-scale ar
rangement initiated under consent
decree in the courts on December
81, 1924, Mr.. Johnstone's petition
charged that it "is predicated upon
a wholly unrealistic valuation basis,
complemented by an unsound de-
probation policy, and results in an
excessive return to the Potomac
Electric Power Co.
Whether such results flow from
the intrinsic defects of the scheme
itself or from the erroneous and
improper Interpretation and appu.
cation of the provisions of the con-
sent decree is not material. The
evils can be wholly eliminated only
by completely abolishing such an
antiquated method for fixing rates
for electric service in the District"
Unreasonable Rates Charged.
FWA further argued that the
sliding scale resulted in unreason-
able rates because. the value of the
properties REPRESENTING : the rate
base of PEPCO under the arrange
ment does not actually constitute
the present fair yatle OF the prop
critics.
1t contended that in determining
valuation for rate-making purposes,
the actual Legitimate cost of the
company's property used and useful
in rendering the services with the
necessary pragmatic adjustments
should be controlling" -,
In his oral arguments, Mr.. john
stone said rates had been estab-
lished under peacetime conditions
and that their application in war
time, when there was an unusual
demand for power, resulted in ''un-
due profits"
Emphasizing that the Govern
ment was not seeking preferential
rate, he said private enterprise was
also being "unjustly burdened."
/ Accountant Testifies.
This years hearing is not only to
determine the rates for 1914 under
the sliding-scale arrangement, but
involves an investigation of the
sliding scale itself. The first witness
for the PUG was its chief account
ant, v. A. McElfresh, who presented
series Of exhibits on the financial
operations Of the company from 1925
through 1912.
The figures presented by Mr..
McElfresh show the rate of return
has been reduced from rs per cent
in 1925 to the present rate Of 6 per
cent, and that the cents per kilo-
watt-hour have gone down for resi-
dental sales from SIG in 1929 to 2.43
in 1912. Similarly, the commercial
rate during the same period went
down from 296 to 1.34 cents per
| kilOWatt-hO,lr