Evening star. [volume] (Washington, D.C.) 1854-1972, 1946-11-18
Appeals Court Judges
Hand Down Opinions
In PUG Rate Cases

The United States Court of APP
peals today handed down opinions
in two cases in which decisions were
announced last July both unfolding
the Public Utilities Commission in
a $1,037,189 reduction ordered in
Potomac Electric Power Co. rates
for the rate year 1914.
In its rulings in July, the appellate
court upheld Judge j. Foster Symes
of Colorado, who was sitting as a
visiting justice in District Court.
In one case, the lower court had
upheld the PUG in an action brought
against it by Pepco and in the Sec
ond, in case brought against it by
the Federal Government.
The Federal Government had en-
tered proceedings as Pepcos largest
consumer and sought greater re-
duction than the $1,037,189 which
the PUG had ordered.
The case has had many angles.
In the fall of 1945 the appellate
court denied a motion to dismiss
the case which had been brought
by the Federal Government after
indicating earlier that the case
should be heard further in District
Court.
Two Dissenting Opinions.
A dissenting opinion accompanied
each of today's majority opinions.
Justice Henry w. Edgerton, who
wrote the majority opinion in the
Pepco case, in which the PUG was
sustained, wrote a dissenting opin-
ion in the Federal Government case
in which greater reduction was
sought.
The majority opinion also sus-
tanned the PUG in that case.
In the case sustaining the PUG
against Pepco, Justice Edgerton in
his majority opinion at one point
said:
Since the company's returns
have greatly exceeded fair per-
centage Of return upon q fair base,
1t follows as matter of law that
the rate charges for electricity in
stead OF being Just and reasonable
as the law requires them to be, have
been excessive. There is nothing
new about this principle"
Return Called Erroneous.
Later in his opinion in that case,
Justice Edgerton said:
We come now to the effect Of the
appeal erderaof the commission. The
order Is designed to result in income
available for common stock, after
meeting all expenses, interest, de-
probation. and preferred dividends,
Of $780, 600 for 1914. This would
be, as the commission observes, 8.9l
per cent Of the common stock equi-
ty.' 1t would also be, as the COM
mission does not observe, some SO
per cent Of the par value Of the
common stock and some 60 per cent
of the amount which the company
received for the stock and invested
in plant.
"The Commission says that the
proposed return, in its opinion, will
enable the company to maintain its
financial integrity, to attract capital
and to compensate its investors for
the risks assumed This Is under
statement if not irony. The risks, if
any, are as small as the human mind
can conceive. The return is enor-
NOUS"
Justice Edgerton concluded the
District Court was right in dis
missing the company's appeal from
the PUG order. Justice Bennett
Champ Clark concurred in the opin-
ion which sustained the PUG In the
Pepco case.
Unauthorized by Statute"
Justice Wilbur K. Miller wrote a
dissenting opinion in the Pepco case
in which he said:
by what I think was an action
wholly unauthorized by the District
statute and in fact in violation Of
its terms, the appellant has been
subjected to a substantial rate re-
duction. I cannot agree to what
seems to me to be a grossly err
roneous conception of the regula-
tory act and an equally erroneous
idea of the Supreme Courts deci-
sions in the Pipeline and Hope
cases."
Justice Clark, in writing the ma
jority opinion in the Federal Gov
eminent case, declared;
$50 far as concerns the appeal of
the United States, it seems to us
that the question is limited as to
whether the order, as it affects the
consumer, is (a) arbitrary or ca
PRECIOUS, or CD invalid as establish
ing rates that are unjust or un-
reasonable. On the record before
us, we cannot conclude that we are
justified in upsetting the commits
sion's order"
Justice Edgerton, in writing his
dissenting opinion in the Federal
Government case, declared in his
opinion:
1.-THE case should be remanded to
the District Court with instructions
to hold it until the commission shall
file an amended order within the
authority given it by Congress.