Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-07-30
Phone RateRise
Is Authorized
For District
cap Disappointed
In Not Getting okuy
On Full Request

The Chesapeake & Potomac
Telephone Co. Is authorized to
raise rates for telephone service
here to bring in an additional
81. 625 900 annual gross revenues
under a Public Utilities Conn
mission order released today.
The figure. $2.775.000 lower
than the $4.4 million boost re-
quested by the company, brought
this statement from H. Holmes
Vogel, c. & P. vice president:
1.-THE commissions order deny
ing us J2,775.000 of the addi-
tional gross revenue requested
is disappointing. It simply
means that our job of meeting
telephone requirements of the
public is made all the more diff
cult.
I'm public hearings before the
PUG. we presented testimony
which we believe fully justified
granting us the full amount
which was sought.
Insofar as our individual
customers are concerned, the re-
duction of increase which viii
result from the commissions ac-
ton will be negligible. The effect
upon the company's operations,
however, can be extremely seri-
GUS"
Await New Rate Schedule.
The commission order directed
the company to file new pro-
posed rate schedule conforming
with the decision.
Another public hearing viii DO
held on the new schedule.
In granting the gross revenue
increase Of $1.625, 900 the COM
mission said this amount would
be needed in order to bring the
company's rate of return up to
6.25 per cent, which the commits
sion finds reasonable. Previ-
ously. the commission had set
from 8 to 6.25 per cent as Q
fair return
In asking for $4.4 million, the
company had sought IA per
cent rate Of return, on the basis
Of its estimates of plant, rev.
enues and expenses.
David A. Kosh, public utilities
consultant retained by the COM
mission, had advocated 5A per
cent as a fair return. James K.
| Macintosh, chief Of the General
Services Administrators Public
Utilities Branch, speaking for
the Federal Government, In
dorsed a 6 per cent rate of re-
turn.
Different Procedure.
This rate case differed from
previous proceedings in that the
company this time came in with
a future annual period as a basis
for its computations, rather than
the previous year. 90
Thus. the 6.25 per cent return
allowed will be on the basis Of
the average rate base for 1854.
Since the rate base is increasing.
this allows a somewhat larger
actual dollar return than would
have been the case under the
old method.
In a 28-page opinion, the
commission analysed the various
contentious raised during the
public hearing on the issue Of
the allowable rate of return.
Discussing its conclusion, the
commission said that on strict
cost Of money" considerations
its subsidiary findings indicate
that the company's position
could be maintained with q 81
per cent return.
"Cushion" Asked.
I'VE believe" said the opinion.
"that, under the present circum-
stances. the company is entitled
to return which will in theory
at least provide q reasonable
cushion against the contingent
cies which have in the recent
past prevented 1t from actually
earning in accordance with. its
own and with the commissions
estimates"
In its estimates, the commits
sion revised the company's
earlier forecast for a decline UNI
der 1853 revenues of $7O9 ,265.
based on an estimated net loss
Of 5000 telephones during 1854
|