Evening star., 1947-09-30
'lloinlg'AealingsT
Seen on Higher e
Phone RateB Bid
Union Opposed;
Valuation Expected
To Be Big Issue

The telephones rate increases
asked by the Chesapeake and Po-
tomac Telephone Co. are likely to re-
suit in many months of protracted
hearings and negotiations between
the company and the Public Utili-
ties Commission, with the public
entering the case from time to time.
Indications that the argument
might become spirited appeared
soon after the company announced
its intentions yesterday. Harry E.
Beitscher, president of the Industrial
Union Council (CIO), attacked the
proposed increase and promised to
fight the raise.
The main fight however, is likely
to come when the PUG and the
company attempt to arrive at mu-
tually agreeable figure on net op-
Grating profit. This, the PUG regu-
lations say. should not exceed per
cent Of rate base valuation.
The company yesterday said it is
earning currently less than 8 per
cent" and that the increase asked
would allow it to earn about S per
cent.
Statement on Hand.
But the company's July statement
filed with the PUG indicates its rate
valuation, which has not been set
officially by the PUG since 1892, is
about $4,000, 900. and its 1916 an
nual statement shows a net operat-
ing profit of $3,551 1896. Taken at
face value, this would indicate 5la
per cent return.
PUG officials, however, say the
company probably will contend legit-
innate deductions would reduce the
net operating profit figure and that
the company is entitled to a much
higher rate base figure than that
indicated by the record.
The rate base set by the PUG in
1882 was $29 9,860,00O, and this still
stands as the official figure, although
it probably is obsolete.
This means the PUG must estab-
lish a new rate base before it can
determine how much profit the COM
pany is entitled to receive. 1t may
take months for PUG investigators
to check and analyze the company'sI
figures.
A check of telephone rate history
in Washington since the early 1920s
shows the increases now asked
would bring the rates back to about
where they were in 1925.
Hearing Date Uncertain. l
In the case of the popular one
party fiat rate unlimited service
used by most Washingtonians, the
monthly rate would be $4.75-the
same as it was in 1925. It is now
1920.
The 1922 rate for this service was
IS. Just before that, it was $3.50.
The telephone company pointed out
the increase now asked is the first
since 1920, when the rate reached
the $3.50 mark.
The PUG yesterday said it did not
know when public hearings would
be held in the case. It may allow
the company to present the particu-
lars of its case right away and then
give its staff plenty of time for the
complicated checkup job it must do.
Or it may hold up the hearings
until its staff is ready to step up
to the firing line.
Virginia Hearing Set.
A hearing on the petition of the
c. & P. Telephone Co. of Virginia
for a rate boost to cover customers
in that State was set yesterday for
November S at Richmond, the AS
sociated Press reported. The vir-
ginia company, also a Bell System
affiliate, is asking for an additional
$l,440, 900 year in revenue. Vir-
ginia phone subscribers already
have had raise in their rates
last January-and the current re-
quest would add another Is cents
a month to residential subscribers
and so cents for business users.
The Virginia State Corporation
Commission said it has under con-
sideration employment of an out
side EXPERT aid the State agency's
staff Of accountants and engineer
in studying the request.
v. A. McElfresh, chief PUG ac-
countant, explained telephone rate
cases are the most complicated of
all the utility cases the District COM
mission handles.
Il wish it were just tokens and
weekly passes" he said wistfully, as
he prepared for the long struggle.
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