Evening star., 1950-12-21
Ban on Gas Rate
Boost Upheld by
Appeals Court
$500, 900 in Rebates
Ordered in Ruling
Against Company

TSuiIISt SOiiiPuny
District Court Judge T. Alan
Goldsborough's order setting aside
the year-old gas rate increase here
was upheld unanimously today by
the United States Court of APP
peals.
In a 13-page, figure studded
opinion, the appellate court or
dered that funds resulting from
the rate increase of November.
194o, be distributed among Gus
toners of the Washington Gas
Light Co.
This total amount approximates
100000 in revenues collected I'M
der the 1949 order Of the Public
Utilities Commission. The PUG
at that time acceded to the gas
company's request for added rev.
enue by. allowing an increase
which amounted to about $750, 900
annually.
Could Go to High Court.
The Appeals Courts ruling on
one of the most widely discussed
District Court opinions in recent
years left the Washington Gas
Light Co.'S only avenue of appeal
in United States Supreme Court.
In his ruling, Judge Colds
borough ordered that the ques-
ton Of rate increases be handed
back to the PUG for new and more
detailed hearings on the subject.
This is left undisturbed by the
appeals decision.
The case against the gas COM
pany was initiated by a private
citizen, Vernon v. Baker, on be-
half of a citizens association
group. He fought his own case
at first single-handed. He based
his attack on the PUG order on
allegations that. in granting the
rate raise, the PUG made certain
errors.
Supported on Four Points.
Judge Goldsborough supported
Mr.. Bakers citation of these four
errors:
!. Allowance, as an operating
cost, of an abandoned SIT million
gas manufacturing plant. 2. AM
ortization Of this cost as an oper-
ating expense. 8. Inclusion of q
$2.7 million cost to the company
of converting home gas appliances
from manufactured to natural gas.
4. Allowance of the new rate to
be % days retroactive from the
date the PUG order went into
effect.
The appeals court in its con-
clusion gave this admonition to
the PUG:
1--WE hold its order invalid be-
cause of the inadequacy of the
record and findings with regard to
the rate of return and abandoned
property"
Bazelon Writes Opinion.
1--WE do not disturb the commits
sions treatment of conversion
costs, but with respect to that
and to the rate base, we have
raised considerations which should
be weighed in any further pro-
ceedings."
The appeals court, in it's
opinion written by Judge David
Bazelon, further admonished the
Commission with these words:
I'VE think the commission
should keep in mind it's obligation
to facilitate judicial review of it's
orders and should assemble a
record and make findings which
cover all the relevant Issues
In announcing its opinion, the
appeals court pointed out that
it agreed with Judge Goldsbor-
ough's ruling that the P. U. c.
order should be vacated and set
aside. But the appellate court
added "our reasons differ ma
terially."
Rate of Fair Return Discussed.
The appeals judges first dis
cussed the question of the rate
of fair return to which the utility
was entitled.
On the question of allowing
the SIT million cost of the aban-
doned plant which the gas COM
pany sought to figure in its
operation costs chargeable to the
consumer, the Appeals Court de-
clared:
Rate payers cannot be re-
quired both to carry this risk
and to pay the company for car
rying it,"
The court added that it was
convinced that the protection of
the consumer interest requires
that such treatment of the aban-
doned property be offset in the
rate of return"
The court also pointed out that
the PUG failed to take adequate
CONTINUED on Page A-4, Col. s.