Evening star., 1948-09-12
Ross|yn GasCo.
Asked by
Arlington PUG
Report on Rates Hits
Excessive Charges
Of Holding Company

The Arlington Public Utilities
Commission yesterday recommended
that the County Board press for
investigations of the RoSslyn Gas
Co. by both State Corporation Com
mission and the Federal Power
Commission.
In 2,500-word report on its
study of Rosslyn Gas Co. rates, the
PUG termed "grotesque' the lex
treme disparity" between rates and
expenses of the utility when COM
pared with those in other areas and
with the national average.
The PUG asserted that the Wash
ington Gas Light Co., which owns
the Rosslyn concern, burdens the
local company with excessive
charges" that cost Arlington con-
sumers hundreds of thousands OF
dollars each year"
Board Accepts Report.
The report was requested by the
County Board last April and was
prepared by subcommittee OF the
PUG comprising Albert A. Carretta
and Laurence S. Knappen. The
board yesterday accepted the re-
port but took no action.
Two weeks ago the Board asked
that another study be made OF the
possibility of rate reduction IN
view of the new connection which
the Rosslyn company is making
with it's source of natural gas. The
gas now is piped from Rockville,
Nd, via the District. The new
connection will be made near Hern-
don, Va, in Fairfax County, to the
line of the Atlantic Seaboard Corp.
which runs on to Rockville, and Will
mean that the gas will be piped dl-
rectly into Arlington.
The PUG declared that Arlington
rates for residential users are ap-
proximately 2107 cents and l7.51
cents per 100 cubic feet depending
on the amount consumed, as against
a national average of 6.66 cents.
IF the . = rates were reduced
to only 10 cents per 100 cubic feet,
there would be an annual saving
of well over 100000 to the COM
panys customers, or approximately
S500000 to those customers resid-
ing in Arlington County" the re-
port said. The firm also serves
Alexandria and portions of Fairfax
County,
eIs Dor To o,,,ily q War
This would be slightly over $40
900 a month, or approximately SIT
per family per year.
The report declared that the rate
which the Washington company
charges the Rosslyn concern has
been reduced about 80 per cent
since July /, 1916.
THE resulting savings of some
100000 year in wholesale cost has
been pocketed in toto by the Ross
lyn Gas Co., with no reflection in
the retail rate" the report asserted.
According to the PUG, report of
the State Corporation Commission
shows the Rosslyn firm saved "in
excess of $250,000" for the II months
ending December 81, 1947, as re-
suit of conversion to natural gas.
Even if the $25OOOO admitted
reductions in expenses were passed
along to the consumers, there would
be a reduction of $4,000 month to
the customers" the PUG stated.
The sec found, the report said,
that the Rosslyn company had a
net 1947 income of $267 1856, and
that the rate of return on an aver
age net investment of $5.323,684
was 500 per cent compared with 3.45
per cent in 1916.
Cost, Sales Figures Cited.
The report said that the Wash
ington company in l947 bought gas
for about 80 cents per 100 cubic
feet. then sold it to its subsidiary
for So cents per 100 cubic feet. The
gas then was retailed in Arlington
for 1851 cents or 2107 cents per
100 cubic feet.
A distribution cost of 3.08 cents
per therm was reported by the
Rosslyn company, the PUG said.
This, it pointed out, compared with
047 cents in Cincinnati, Ohio, for
example. Customers collection and
accounting costs in Arlington and
Alexandria were reported as 1.4l
cents as against cost OF 0.l9 in
Cincinnati, and sales promotions
costs were 055 cents as against 0.07
in the State of Ohio.
1T will be remembered that most
of these costs are not directly at
tributable to the Rosslyn Gas Co.,
but are the results of allocations by
the Washington Gas Light Co. to
the Rosslyn Gas Co., on the basis
of formulas determined by the par
ent company and which have never
been disclosed to u.s. the PUG as
serted.
The PUG said it had been in
formed by a member of the sec
staff that the rate of return of the
company was expected to excel 6
per 'cent by July /, 1946. Six per
cent is the maximum allowed by
the sec.
Excess of So Return Seen.
at seems reasonable to assume
that the rate of return presently
realized by the company is in excess
of per cent " ="
The sec has the authority to
order a general investigation to
determine whether company rates
are reasonable and proper" the
PUG declared. adding that mot
withstanding it should be
noted that no general rate inves-
tigation respecting the rates of
the Rosslyn Gas Co. has been held
by the State Corporation Commits
sion for about IS years"
1T seems to us significant that
the parent company - reported
its net earnings after depreciation
aud +oyes at 60 265 461 for the II