Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-01-04
Transit, Pepco
Ask Approval
OF Rate Accord
Joint Request Filed
With Commission
Cites Agreement
By Hector McLeon

Cites Agreement
By Hector Mclean
The Capital Transit Co. and
the Potomac Electric Power Co.
today asked the District Public
Utilities Commission to approve
an agreement under which Cap
ital Transit would drop its OPP
position to a rate increase re-
quested by Pepco.
The joint request came as the
commission reopened public
hearings In the District Building
on Pepco's bid for an overall
rate increase to its $4,000 Gus
toners OF $5.785. 900. an average
monthly boost Of II per cent.
Under Pepco's original bid Tor
the increase. Capital Transit
would have faced boost in costs
Of an estimated $I40.S83. In the
settlement which the commission
today was asked to approve, Cap
ital Transit would pay $70,6l5
more for its electric power.
Public Hearing.
Chairman Robert 4. Nc
Laughlin of the Public Utilities
Commission ordered a public
hearing on the proposed inter-
company agreement on Janu-
ary IA.
Announcing the agreement to
the commission, James Francis
Reilly. Pepco chief counsel, re-
called that the two companies
have handled rate problems be-
tween them in negotiated con-
tracts ever. since the transit
company was formed in 1888,
with one exception.
This was in 1851, when the
Utilities Commission granted
Pepco a general rate increase,
vigorously opposed by Capital
Transit, which cost CTC $780,
600. This was appealed to the
courts and has been ordered re-
heard by the Public Utilities
Commission. Capital Transit,
however. Withdrew its oppose
ton and accepted the increase
charge. The new agreement,
under which Capital Transit
would agree to an additional
$4,000 a year In power rates,
would bring the increased bill
for etc to 100000 as COM
pared to 1850.
The two companies asked that
the new rate be allowed to go
in effect next January 81. The
agreement would continue for
two years and could be re-
opened for negotiation january
!. 1857.
Other Contracts Cited.
F. Gloyd Await, etc counsel,
said the agreement was "not
Q novel affair."" Sixteen other
cities. he said, have such con-
tracts between power companies
and transit companies.
He warned that "time, energy
and money" are needed to con-
duct or to fight a rate case and
said approval Of the agreement
would save considerable money
which We would have to spend il
we continue to fight an in
crease"
Assistant Corporation Counsel
Lloyd B. Harrison, assigned to
the Utilities Commission, called
the proposed agreement. a NOR
NAL proceeding. as see it. and a
chance to save money for the
users of both utilities" Also, he
said. 1t would save much time
for the commission itself.
The agreement, If approved,
would end q long running fight
between the two utilities COM
panies.
Cross Examination.
After announcement of the
agreement. the commission con-
tinued its hearing to permit
cross-examination Of Pepco wit
nesses who had testified for the
company at the opening hearings
last November.
Mr.. Await dropped his plans
to join in the REORGANIZATION
but reserved the right to do so
later II the Pepco-C Capital Transit
agreement should not be APP
proved by the commission.
The first witness cross-exam-
ined was DR.. Ralph E. Badger,
New York and Detroit financial
expert. who had testified for the
company last November.
During cross-examination, Mr..
Harrison hammered away at
technical financial data used by
DR.. Badger to justify his conten-
ton that Pepco should receive
6.5 per cent rate of return on its
property investment used for
public service In the District.
Company witnesses have said
the Arm Is now earning about S
per cent and Pepco. in its present
rate case. Is formally asking for
q rate return of 6.25 per cent.
Though these percentage figures
differ only slightly. they are
measured in hundreds OF thou
sands Of dollars Of the company's
annual income.
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