Evening star., 1947-12-10
Present Pepco
Rates Assured
ByPUC Action
Company Permitted
To End Monthly
Refund Deposits
By Jerry O'Leory, Jr.

There will be no increase In elec-
trio rates for Washington consul
mers, at least for a few months.
This was assured yesterday when
the Public Utilities Commission
ruled that the Potomac Electric
Power Co. may use every cent paid
by its customers instead of setting
aside $4,000 each month for Gus
toner refunds, beginning last Octo-
ber l..
At the same time, the PUG:
Deferred action on a sweeping
plan authored. by v. A. McElfresh
PUG auditor, for complete revision
Of the so-called sliding scale" setup
for electric rates.
Denied Pepco's request for release
of $673,178 in funds already set aside
this year for customer refunds.
Need of Adjustment Seen.
The PUG decision, dealing with
the monthly deposits Pepco has
heretofore been required to make
declared:
TT is obvious (the money! was
intended to be available as means
Of furnishing relief in the event the
earnings of the company should fall
below what might be considered a
fair return. In the opinion of the
commission, the record indicates
that the company's earnings at their
present level necessitate an adjust
ment of the rate schedules.
"The commission also feels that
further rate adjustments can be
avoided by permitting the company
to retain as earnings, commencing
October l, 1947, the full amount
billed to its customers"
The ruling points out that per-
mission to use the funds Is made
retroactive to October l because
Pepco's petition for relief was filed
on October II but that the PUG was
unable to act without full investiga-
ton. The order, therefore, rescinds
the requirement for monthly de-
posits of the sos, 900 as of October
and permits Pepco to withdraw any
deposits made by Pepco since the
petition was filed.
Lower Return Shows.
Decision as to final disposition of
the $673,178-which Pepco also
wanted released-will be reserved
pending decision on the McEl-
fresh plan for modifying the Slid
ing scale"
Pepco testimony presented at the
hearings last month revealed that
the company's rate of return had
decreased from 5.82 per cent in 1943
to 4.95 per cent in the year ended
September, 1947. At the same time
Pepco witnesses declared operating
expenses, exclusive of taxes and de-
probation, had increased, particu-
larly for fuel.
These factors, Pepco asserted, re-
duced its net earnings to such an
extent that for the IL months ended
September 80, 1947, the rate of re-
turn earned had fallen well below
the basic rate of return allowed
under the sliding scale arrangement
Reduced Sum Disclosed.
Charles L. Carr, Pepco's assistant
controller, testified that, for the
same 12-month period, income avail
able for return on the rate base
was $475,024 less than the basic re-
turn calculated at 51a per cent of
the rate base.
The sliding scale arrangement
provides that, if 1.-THE rate of return
for any two consecutive years falls
below 5A per cent of the rate base,
or if the rate of Seturn for any u
months falls below 51a per cent of
the rate base, the PUG shall increase
rates to bring the rate of return to
near 6 per cent.
The PUG contended, however, this
paragraph does not call for a retro
active adjustment of rates and de-
MED the Pepco petition for release
of the deposits prior to October /.