Evening star. [volume] (Washington, D.C.) 1854-1972, 1959-02-17
PEpCO Asks
Prompt Rise
In lis Rates
Emergency Claim
Is Challenged
By PUG. Attorney
BY JAMES G. DEANE
Star star Writer.

oeaA ot~A WAAeeAs
r. Roy Dunn, president Of
Potomac Electric Power Co.,
told the Public Utilities Com
mission today the utility must
have an immediate rate increase
to raise funds for essential Dis
trict area electric expansion.
The PEPCO head expressed
doubt that the company could
attract needed new investment
capital without what he termed
emergency relief" The firm
has asked a sos per cent rate
increase effective March /.
Lloyd B. Harrison, chief
P. U. C. attorney, challenged
the Dunn statement that the
utility faces an emergency.
Mr.. Harrison told the COM
mission that on the basis of the
testimony Of PEPCO officials at
the public hearing this morning
there is no justification in my
opinion for considering this APP
LEGATION an emergency situa-
ton"
The P. U. C. counsel added.
however:
This doesn't mean, / say
there is no justification for
some increase in rates"
To Oppose PEPCO Plans
Mr.. Harrison also served no.
tice that as matters now stand
he will oppose the utility's plan
to file for a higher allowable
rate of return and still higher
rates to consumers late this
year.
MI. Dunn said the further
application under present plans
will probably be filed about No
vember /. The company hopes
to obtain a higher earning cell
ing than the present 5.85 per
cent set by the commission in
1855.
The P. U. c. counsel con-
tended that PEPCO need not
expect the storm so soon"
with respect to need for boil
STEERING the company's finances.
Mr.. Harrison said he might
change his mind about the
intended November action if
experience in the meantime
shows a justification for it.
James Francis Reilly, PEPCO
counsel. said the companyiS
term emergency. may be argu-
able" He added, however, that
he thought the use of the word
well advised.
President Dunn Emphatic
MIR. Dunn, for his part, was
emphatic about the company'S
financial predicament. He said
the utility plans to issue new
stock this year and he pre-
dicted that without a rate in
crease the stock could not be
sold.
Under questioning from Mr..
Harrison the PEPCO president
conceded that the company's
earnings per share increased
considerably following the rate
increase granted in 1855. Mr..
Harrison stated that earnings
in the first year after the 1855
rate rise climbed .3l.6 per cent
But costs also have been rising
rapidly. the PEPCO executive
stressed.
And he commended that the
company's rate of return has
never gotten to the point
] where we had a good end re-
suit" in terms of earnings.
Mr. Harrison noted that earn
ings had risen from SLIT pei
share in 1854 to $1.57 & share
last year.
II would call that earning
increase growth" the P. U. C.
attorney said, adding: You
wouldn't call that growth?"
NO" Mr.. Dunn replied.
The PEPCO president added
that the company wants to get
into the position where it can
finance any time it wishes to
He said it would be to the ad-
vantage of the public, as well
as the company. if the firm
could have the highest credit
rating in the United States"
The hearing was recessed to
March 5 to allow study by the
IP. U. c. staff.