Evening star., 1950-10-27
Capital Transit
Asks 100000
Pepeo BiIICut
Seeks PUG Reduction
Rather Than Increase
OF $500 in Year
Bv Colt HendIev Ir
By Colt HendIey, Jr.

A Capital Transit Co. official to.
day asked the Public Utilities
Commission to reduce his com.
pany's power bill 100000 a veal
rather than boost it by So PEI
cent as proposed by the Potomac
Electric Power Co.
The demand was made by j. E
Heberle, transit company vict
president and controller. He de-
clared that the transit company
is paying 81 per cent more fol
its power now than it did in 1913;
and under the Pepco propose
the cost would be 1853 per cent
above the 1888 figure.
The hearing was recessed aftel
the transit company completed it:
plea. The recess was ordered by
Chairman James H. Flanagan tt
give time for participating parties
to prepare their cross examination
of the transit witnesses.
Sepco is seeking an overall 81
per cent increase inTates designed
to boost its revenues by $3,379, ,00(
a year.
Compares Electric Rates.
Mr.. Heberle testified that in
1888, when the transit company
was created from a merger of
the old Capital Traction Co. and
Washington Railway & Electric
Co., it paid 593 mills per kilowatt
hour. Now, he said, it is paying
an average of 991 mills. Based
on the cost of production of the
power, Capital Transit should be
paying 8.78 mills per kilowatt
hour now, he declared.
Capital Transit's annual power
bill now amounts to $935,000. The
Pepco proposal would tack on an
additional $557.0O0. Such an in
crease, the transit company has
stated, would mean another boost
in the streetcar and bus fares.
Refers to Fuel Clause.
In discussing the power con-
tracts signed with Pepco at the
time of the merger, Mr.. Heberle
pointed out that the Capital Trac-
ton Co. manufactured it's own
power while the Washington Rail
way & Electric Co. purchased ii
from Pepco. He said the power
question was an important factor
in the merger since the result was
that the new Capital Transit Co.
was able to purchase power
cheaper than it had manufac-
tured it.
In consideration for the power
rates, the Capital Transit Co.
turned over to Pepco property and
equipment which Pepco has been
using ever since without compen-
sation to the transit company.
Mr.. Heberle also said that a
fuel clause in the power contract
allowed Pepco to raise it's bill to
the transit company as the cost
OF fuel rose. But this clause does
not give the transit company
credit for Pepco's increased eff
f1ciency in the use of the fuel, he
added.
Increase in Rates Cited.
The first Capital Transit witness
yesterday was Robert E. Harvey
special assistant to the controller
who said the transit company
electric bill has climbed every
year for the past II years, while
rates of other Pepco customers
have been reduced.
Mr.. Harvey said residential
customers electric bills have been
cut So per cent since 1888 and
still would be 33 per cent lower
than 1888 bill under Pepco's pro-
posed new rate schedule.
Rates for commercial custom
ers have been reduced 80 per cent
since 1888 and would be 25 per
cent below the 1888 bills under
the proposed rates. he stated.
Eugene Penny, valuation en-.
gineer for Capital Transit, pre-.
sented to the PUG a list of build
ings, land and other equipment
the transit company turned ovel
to Pepco in 1888 at the time oi
the merger.
Mr.. Penny gave the total valu-
alton of all items turned owe,
as $1,735.573-at current prices
He testified the transit company
has been paying taxes and in
surance on the property ano
equipment since 1888 and Pepco
has paid nothing for it's use.
Also listed by Mr.. Penny as
being used by Pepco were Il
miles of Capital right t-of-way over
which the power company has
run transmission lines.
Two Recommendations.
AS the hearing stands now, the
PUG has before it two recon-
mendations in addition to Pepco's
request.
v. A. McElfreSh, PUG executive
accounting auditor, has recon-
mended that the power company
be granted GA per cent increase
to bring in an additional $2.s
million a year. This return is
slightly above the 512 per cent
return on the company's weighted
rate base. which the PUG con-
siders a fair return, but Mr.
McElfresh said the company
needs leeway because of economic
conditions.
David A. Kosh, chief of thu
public utilities branch of Genera
Services Administration has rec.
commended that the PUG limit thu
company to a 512 per cent re.
turn on the rate base, abou
$2,219,000 additional revenue an
nually. The Federal Government
one of Pepco's biggest customers
faces an II per cent jump in it,
power bill under the Pepco pro.
yoosol