Evening star., 1944-03-01
Pepco Figures
Show Income
Under 6Pct.
Neal Reiterutes
Company Doesn't
Seek Increase
BY CAMBRIDGE CRIST.


The Potomac Electric Power Co.
today presented to the Public
Utilities Commission figures show
ing it had earned in 1943 between
S715,OO0 and 1901, 900 under the
per cent rate of return allowed by
the commission.
Alfred G. Neal, president of
Pepco, repeated his statement of
yesterday that the power company
was not seeking an increase in
rates, but was merely trying to
show it had not earned fair rate
of return under the sliding scale
arrangement for annual rate ad-
justmentS.
Yesterday V. A. McElfresh, chief
PUG accountant, estimated the
company's rate of return last year
was 6.73 per cent and that, under
the terms of the sliding-scale agree
ment, $390,57440 was available for
reduction in this years rates.
Pepco Controller Testifies.
Harold G.. Hayden, controller and
first witness of Pepco in the hear
ings, testified that if Pepco were
permitted to make provisions for
retirement of wartime facilities the
rate of return in 1943 would be SIS
per cent, which would mean it
earned 1901 ,840.56 less than the 6
per cent.
If no provision were made for re-
tirement of emergency facilities the
rate of return in 1943 would be 5.33
per cent, or $715,63280 less than the
allowable 6 per cent return, he
added
Mr.. McElfresh estimated the rate
base of the company on December
81 at S105,578, 1928, while Mr..
Hayden set the figure at SLOT, ,1O6,-
516.40: Mr.. Hayden said the princi-
pal differences between Mr.. Nc
Elfreshs figures and his own calcu-
latiOnS arose over the handling of
taxes.
At the outset of today's session
Alan Johnstone, general counsel of
the Federal Works Agency, who has
demanded abrogation of the sliding
scale arrangement, received the
right to cross-eXauine witnesses
later in the proceedings. He said
he had no testimony to present now.
Business of Commission.
Mr.. Johnstone said he would rely
on the material presented by PUG
experts. Asked by Chairman James
H. Flanagan if he had a better
plan than the sliding scale, Mr..
Johnstone said he did not assume
the burden of presenting a better
arrangement" adding that 'it is
the business of this commission to
conduct continuous inquiry to The
end that justice will be done to the
utility and the consumer
Questioned by Commissioner
Gregory Hankin on whether he
would insist on abolition of the
sliding scale if just and reasonable
rates could be reached under it, Mr..
Johnstone insisted that no "auto-
matte arrangement" could provide
lawful rates. He said he regarded
the sliding scale as formula with
out continuing examination of
the facts"
Mr.. Johnstone, under further
questioning by Mr.. Hankin, con-
ceded that he would be agreeable to
a sliding-scale arrangement if the
rates and earnings of the power
company varied each year according
to what ne termed the actual ex-
perience" of the power company.
Might Drop Sliding Scale.
Mr.. Neal served notice yester-
day that if there was sub
stantial modification of the rate
of return he would urge the Board
of Directors to withdraw from the
sliding-scale arrangement. Harry r
Booth, special counsel for the Treas
ury Departments Procurement Divi-
sion, was unable to get Mr.. Neal to
define substantial"
While the FWA has fatty de-
manded abrogation of the sliding
cSciC al oAlSCl1iSllU, I1l. odlQ
the Procurement Division was pri-
marily concerned with modifying
the scheme.
I'VE have not taken the position
at this time that the sliding scale
should be abandoned because we
thought the Public Utilities Com
mission would be principally inter-
ested in modification" Mr. Booth
added.
Mr.. Booth said that while testi-
mony had not been prepared on
abandonment of the arrangement
I'VE don't wish to waive our rights
an indication they might go beyond
seeking modification.
fl Ill Gill; rl