Evening star., 1950-11-30
Capital Transit
Asks Probe Of
PepcoStatistics
! PUG Inquiry Sought
On Data Furnished
In Rate Boost Plea

A spokesman for the Capital
Transit Co. today called for an
investigation by the Public Utilities
Commission of statistics supplied
by the Potomac Electric Power
Co. in support of its request for
rate increase totaling $3,379, 900
Robert E. Harvey, special as
sistant to the controller for Cap-
ital Transit. told the commission
that for three months prior to
October, 1850. Pepco's construction
bills Jagged increasingly behind
company's estimates. Then in
October, he said, the trend was
sharply reversed and construction
costs rose above estimates.
Il believe that such sharp
reversal of trend should be in
vestigated," Mr.. Harvey said.
Pepco Attorney Objects.
The company'S construction
costs are important because they
affect the total capital investment
of Pepco on which a reasonable
return and. hence. rates are
figured.
Pepco's attorney, Cornelius
Means, Immediately objected to
the statement and asked that it
be stricken from the commission
records.
PUG Commissioner James H.
Flanagan asked Capital Transit's
attorney, Daryal Myse:
Just what do you mean by
that? Are you imputing falsity
to these figures?"
He labeled Mr.. Harvey's state
ment as a very serious accusa-
tion."
Mr.. Myse replied that neither
he nor the witness were drawing
conclusions, but we think that
such reversal which takes place
while this rate hearing is in prog
ress should be explained as
matter of good accounting"
Mr.. Flanagan took the matter
under advisement.
Third Estimate of Needs.
Mr.. Harvey said yesterday that
Pepco is entitled to no rate in
crease at all, under the latest cal
culation presented by the Capital
Transit Co.
Figures offered by Robert E.
Harvey. special assistant to the
controller of Capital Transit, to
this effect were expected to under
go further examination today at
the Public Utilities Commission
hearing.
It was Mr.. Harvey's third esti-
mate of Pepco's revenue needs to
give it 51a per cent return on its
rate base. Previously he had ex-
pressed the view the power COM
pany should have a revenue
increase of $684, 500, then later
that down to $147,604.
In testimony yesterday, he esti-
mated that, under present rates,
Pepco would earn $152,231 above
a 5la per cent return next year.
He based his latest revision, he
said, on an adjustment in the
company's sales figures for 1949
to show sales made by the Brad
dock Power g. Light Co. in Vir-
ginia, then q wholly-owned sub
sidiary, but merged with Pepco
the first Of this year.
Faces So Pct. Increase.
The company's sales figures for
1850. therefore, included Brad
dock, while the 1949 figures did
not, he explained. These figures
are used in estimating future reve-
nue..
Under the Pepco proposal, Cap
ital Transit faces a So per cent in
additional annual revenue through
an overall 91a per cent increase
In electric rates.
Under the proposal, Capital
Transit faces a SO per cent in
crease. The transit company is
fighting the boost and contends
1t should get substantial reduc-
tion.
v. A. McElfresh, PUG account
ant, has testified he believes an
additional $2.5 million a year
would be enough to keep the power
company In sound financial condi-
ton.
The hearing has been in session
at the District Building at vari-
Gus times since August 81.