Evening star. [volume] (Washington, D.C.) 1854-1972, 1959-04-10
PEpCO Wins
7% Rate Rise
From PUG.
DC. HousehoIders
Will Average 55c
Increase Monthly

increase Montnly |
The Potomac Electric Power
Co. today was granted a 2 per
cent rate increase by the Dis
trict Public Utilities Commits
sion.
The rate increase. which the
company requested in Febru-
airy as an emergency measure,
will add IS cents to the average |
householder's $6.72 monthly |
bill.
The company has filed for |
similar rate increases with the
Maryland and Virginia regula-
tory commissions. In addition |
to its District customers.
PEPCO serves two-thirds Of
Montgomery County, half Of
Prince Georges and part Of Ar
lington.
The commission today said
the District rate revision viii
become effective on billings
based on meter readings be-
ginning April %.
In addition to the 7 per cent
increase. utility officials have
also said they plan to ask for
a substantial increase later this
year in the company's allow
able rate of return, now SIS per
cent. Today the commission
strongly indicated that it would
turn down such a request.
Experience Awaited
I'VE find that there is
nothing in this record to in
dictate that any further in
crease in rates should be con-
sidered until there has been
SUFFICIENT experience under the |
proposed rates GRANTED today |
as a basis for determining the
actual operating results there
under" the commission said.
A 500 per cent increase was
granted to allow the utility to j
lift its earnings to the per-
mitted SIS per cent ceiling.
PEPCO had estimated that
the requested rate increases in
the District and in nearby
Maryland and Virginia would
add $4,8i9,157 to the company'sl
annual revenue and would
produce a net $2.171, 900 after
taxes. The increase granted
today is expected to bring in
$2,937,759 in gross income.
The commission calculated
its increase on the basis of a
6.95 per cent increase in Mary
land and 6.82 per cent In Vir-
ginia.
Investment Need Weighed
In granting the requested in
crease. the commission agreed |,
with arguments by PEPCO Of
f1cials that the increase was
justified because of declining
earnings and the need to
finance a major construction
program. Company officials
testified that PEPCO would
have to raise $31 million addi-
tional investment money this
year to carry out the con-
struction projects.
The commission, in its ruling,
said that 1t found that "the ex-
listing rate schedules are unjust,
and that an increase in rates
is necessary to allow a fair re-
turn upon the company's in
vestment and property devoted
to public service"
In indicating that it would
turn down an appeal later this
year to raise the allowable rate
of return. the commission said.
in effect, that PEPCO had over
stated its financial plight. The
commission backed an opinion
by its chief accountant, ]. w. !
FaIk-rather than arguments
by the company-over the
proper way to measure the level
of earnings for past years.
Mr.. Falk, however, had testi-
fled that he felt the company's
Z per cent rate increase request
was justified.
In its ruling. the commission
cited figures showing that
PEPCO'S rate of return dropped
from 500 per cent at the end
of 1857 to $40 per cent at the
close Of last year.
PEPCO's application was op-
posed by the General Services
Administration. The Govern
ment, which pays an annual
$14 million electric bill, is one
of the company's largest custo-
mers.