Evening star., 1947-05-06
3 million Refund
By Pepco Seen
In Court Ruling
PUG Coils Herring
To Determine Plan
For Rate Reduction

the Districts electricity users may
get refunds over the past three years
totaling approximately 5000, 900.
This follows the Supreme Courts
decision yesterday not to review the
Potomac Electric Power Co.'S rates.
The Public Utilities Commission
now plans to hold hearings begin
ming May ~ to establish how rate
reductions for 1914, 1945 and 1916
lwill be accomplished -and just how
much win be involved. Problems
relating to this also will be threshed
out at the hearings.
Gives No Reason.
The Supreme Court order yester-
| day turned down pleas both by the
Government and Pepco to review q
1914 PUG order whereby Washing
tonians will get refunds totaling
81 ,037, 900. It gave no reason for this
decision, merely refusing a petition
for review.
Legality Of the order was upheld
both by District Court and the Ap-
|peslS Court here. This was consid-
|ered victory for PUG Counsel Lloyd
B. Harrison, who defended the COM
missions position.
James II. Flanagan, PUG chair
man, explained today the litigation
has held up commission hearings on
Pepco rates since 1914. He said
Pepco has set aside on its own mo-
ton on its books q reserve OF 81 ,095,-
600 for the calendar year 1945 as q
potential refund. The company also
has set aside reserve of 81, ,260, 900
for the calendar year 1916, also for
refund purposes, Mr.. Flanagan
pointed out.
Applies to Rate Year.
The 81 ,037 900 applies to the rate
year from March !, 1874, to Fehru-
ary %, 1945, Mr.. Flanagan declared.
He said, Of this sum, $840, 900 is ap-
plicable to the period from March
l to December 81, 1914, and has
been set aside by Pepco.
The 1945 reserve of 81 ,095 900 and
the 1916 reserve of $1,260,00o were
set up for calendar years and their
ALLEGATION to the rate years are to
be determined.
Refunds for the rate years begin
ming March /, 1945, and March /,
1916, remain to be determined by
the PUG after hearings.
The chairman said that refund
of the 81 ,037 900 will start as soon
as PUG determines the proper
method of distribution.
Hearings Start May n.
The hearings starting May q will
decide on an official method for
paying all refunds due, he ex-
planned. Rate hearings, stalled by
the lawsuit, will now be completed.
At the hearings held in the spring
Of 1945 there was no testimony,
either by PUG or Pepco, due to the
litigation.
In the spring Of 1916, the COM
mission testimony indicated a fur
ther reduction Of some $3.50, 900
might be called for, but the COM
pany introduced no evidence, Mr..
Flanagan said. Now, Pepco's OPP
erations for 1916 will be reviewed.
The rate year starts on March of
each year.
In the Supreme Court, the Fed
eral Government had asked for a
review of the PUG order, contend
ing electric rates in the District
were unjust and unreasonable. OFF,
cials said the Government has been
paying more than $5,000,0O an
nually for electricity. Maj. Gen.
Philip B. Fleming. Federal Works
Administrator, had asked the JUS
tice Department to carry the case
to the highest court.
Government Contention.
The Government contended Pepco
has built up a surplus of $29, ,000, 900
over the years. It said this repre-
sents involuntary customer con-
tributions to capital on which Pepco
is not entitled to a return" It de-
clared the commission has never
attempted to recapture any portion
of the excess earnings.
Pepco, in its appeal to the Su-
preme Court, asked that the law be
clarified. It said about a fourth of
the States, which have laws similar
to that of the District would be con-
fused if the Appeals Court decision
upholding PUG, stood.
The company argued in its brief
the PUG order scrapped the long
existing formula for rate fixing and
was illegal and void. It wanted the
highest court to rule on whether
PUG had to evaluate the company's
property and establish a set rate of
return on its investment, before or
dering new rates by commission
action alone, without company con-
sent.
" Doom Victims
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