Evening star., 1947-03-09
Pepco Files Request
with Supreme Court
To Review Rate Cut
By WiIIiom A. MiIIen

/ pany Is seeking q supreme Court
review of an Appeals Court deci-
sion, upholding 1914 Public Utili-
| ties Commission order, reducing
light and power rates here by more
than $1,000, 900. The firm has fled
a request with the highest court
/ for a writ OF certiorari. Construc-
ton Of the District Public Utilities
Act is at issue. the company asserts.
1t says about a fourth of the
States of the Union which have pub
lie utility laws similar to that Of
the District, will be confused If the
appeals decision stands without a
Supreme Court ruling. The highest
courts Of those States will look to
the appeals decision, in deciding
their own cases, unless the Supreme
Court acts, the company contends.
PEPCO contends the PUG order
scraps the long existing Sliding
scale" formula for rate fixing, fails
to comply with the law and Is there
fore void.
Clarification Asked.
The PEPCO lawyers, s. Russell
Bowen and II. Wise Kelly Of Wash
ington and T. Justin Moore of
Richmond, Va, advised the Supreme
Court in their printed brief that diff
fering opinions of the three Appeals
Court judges "obscured" the long
standing rate-making formula in the
District. PEPCO wants the Supreme
Court to clarity the situation. The
company's position Is that any
change in the formula can be at
tanned only by "the compromise pro-
cedure Of mutual agreement" or by
fixing rates on the present fair value
OF the company's property.
The company contends Congress
requires valuation Of its property be-
fore rates can be established with
out the firms consent in the Dis
trict. That, the company says, has
been established by prior lower court
decisions here and affirmed by the
Supreme Court itself.
PEPCO informed the Supreme
Court that PUG ordered q rate re-
duction Of $1,037, 900 annually by
Topping of $25,00o,O00 from the
S106. 100000 rate base and changing
each OF the other fundamental
terms of the formula" PEPCO asks
the Supreme Court to grant 1t re-
lief from this action, which 1t calls
one-sided.
Rates at Issue.
The company claims the heart of
the case is whether or not PUG has
to value the companys property and
establish a set rate of return on its
investment, before ordering new
rates by commission action alone,
without company consent.
At issue are PEPCO rates, the
value of its property devoted to pub
lie service and the amount Of return
it should be permitted to make on
its investment. The Appeals Court
sustained District Court, which up
held the PUG revision of the Slid
ing scale" arrangement and the rate
reduction.
Under the Sliding scale" plan,
PEPCO and PUG agreed to an an
II AAonA lSAuNiAOA1 lIl .. Ulllo
by half the excess OF net income
above an approved earning rate on
investment. An agreed provision
was made for property depreciation.
The company kept half Of any ex-
cess net income as an incentive 10
further investment and service
efficiency.
Annual Hearings Conducted.
PUG annually conducted rate
hearings to inquire into PEPCo
finances for the prior calendar year.
II less than the authorized return
has been realized, PEPCO could seek
. rate increase.
District Court ruled the rate Of
return allowed PEPCO under the
1914 PUG order was reasonable"
and not confiscatory. Visiting Judge
]. Foster Symes Of Colorado, sitting
in District Court, on January as,
1945. dismissed the company's ap-
peal from the PUG order. He held
the Federal Government, PEPCO's