Evening star., 1952-07-09
DC. and County
Gas Light Firms
Merger Likely
PIons Are Announced
At Rockville Hearing
To Renew Franchise

Plans for consolidation of the
Washington Gas Light Co. Of
Maryland, Inc, and its sister or
ganization in the District were
announced yesterday at q Mont
gomery County Council meeting
in Rockville.
The announcement came amidst
q discussion of the councils re-
newal Of the 25-year- r-old Potomac
Electric Power Co.'s franchise in
the county. The present franchise
expires next month.
Oscar Berry, attorney for the
Maryland gas company, said the
council has scheduled public
hearing for August 10 on q new
franchise for the proposed merged
firms. Once franchises are OBJ
tanned. the State Public Service
Commission must act on the plan,
Mr.. Berry said.
Mr.. Berry and Arthur j. Hilland.
another attorney for the gas COM
lpany. opposed a council move to
charge Pepco a franchise fee for
operating in the county.
Now Pays Nominal Fee.
/ Mr.. Berry said the county would
be setting a new precedent by
lcharging such q fee. Pepco now
lpays only a nominal fee for oper-
ating in the county.
Mr.. Berry said the planned con-
ISolidation is aimed at cutting
operational costs and providing
better services for its $4,000 con-
sumers in Maryland and 100000
in the District.
He warned that, II . burden
some" franchise fee were placed
on Pepco. it could block the plans
for consolidation of the two gas
firms. The gas company in Mary
land now has a perpetual
franchise, and the company pays
no fee for it. The new firm would
have to get a new franchise.
The county council, at its May
Legislative sessions, tabled q bill
that would have charged Pepco q
franchise fee equal to 3 per cent Of
ftS gross revenue in the county.
Calls It Indirect Tax
Cornelius Means, general coun-
sci for Pepco, described the fee as
l"just an indirect tax'' which
county residents would have to
Ipay.
Mr.. Means said Pepco's only
proposal was renewal of its present
25-year non-exclusive franchise.
He said, however, that, If a fee 10
charged. the company would
rather be assessed q lump sum
than q percentage fee.
] Mr.. Means pointed out Pepco
paid some $185, 900 in Montgom-
cry County last year and will pay
some $240.000 during the present
fiscal year. He added. based ON
last years tax rate, the company
|expects its 1860 tax bill to be some
$750, 900.
\ Pepco officials left yesterdays
meeting expecting to be contacted
soon by council members with
powers to negotiate Q franchise
and franchise fee.
The council. however, after the
hearing. directed County Attorney
David Macdonald to draw up .
franchise ordinance for its action.
THE ordinance then will be sub.
United to Pepco for its considera.
Ition.
| ; Per Cent Suggested.
! The 3 per cent fee suggested BY
the council would have cost Pepco
some $3.50. 900, based on its gross
revenue estimated at IS million
yearly.
| Mr.. Berry's story Of taxes paid
lthe county paralleled that Of the
IPepco representative.
4 Mr.. Berry said the firm paid
l$22 900 in county taxes in 1885.
land $4,000 in 1850. During the
current year, he said, the gas COM
pany would pay some $500 900 In
county taxes. The new storage
plant near Rockville accounts for
part of the increase.
i Mr.. Means accused the council
lof trying to get in on the profits
Iof the utilities. He added that the
; council apparently did not realize
! that whatever fee or tax 1t col
lected from Pepco would be re-
Elected In rates charged consum-
lers.
A suggestion from MIR. Berry
that $500 would not be considered
ID burdensome franchise fee BY
1.-THE utility firms brought laughter
from council members. The MEM
Ibers shortly before had been talk
ling Of annual fees ranging from
100000 to 100000.
/