1977-01-24 Special Meeting - Laserfiche WebLink

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•• Mr. David F. Webb • - 2 - ~ January 6, 1977 7. They are asking that the rate design be substantially as proposed. Of course there again I have not seen the details. 8. The rate schedule includes the clause which each year would adjust rates to compensate for the increase of providing services. This is on top of the monthly cost of gas. adjustments. The following statement is of utmost interest. "It is now appearing clearly estab- lished that wages-and other expenses will increase regularly at a rate which will require annual adjustments in our rates to our customers". I shall like to challenge that statement and ask them how they know what the future holds when it comes to wage rates, prices, etc.? Companies should not be allowed to plan and anticipate additional and continued inflation. • 9. Number nine (9) states that no action on sary for these rates to go into effect. now not yet made a full rate study. Undo ment to that effect. -They indicate that which they are proposing,,is unacceptable ;?are a rate study. Of course, they mean tTrey are entitled to. the part of the city is neces- Presumably the. company has of ~r nine (9) they make the state- if this uniform change, to the city they-will then pre- the full return they think 10. The Company indicates further horse trading by offering to make the effected date May 1, after the cold weather is over in order to avoid placing the increase in effect during cold winter months. Further I do not think much of this horse trading approach because this whole • approach here is to ask fora cost plus arrangement whereby Entex can automatically pass on their increases and maintain who knows what level of earnings. In effect they are advocating to do away with the old fishing license theory of regulations. Under this theory a company is given a set of rates and told to go and do the best they can with these rates, that if they are efficient they should make money and if they are inefficient they may in fact lose money. Naturally, a small town or village who does not have competent staff to keep constant surveillance over the company's operations may be at a major disadvantage under an arrangement in the nature proposed. SUMMARY: • • 1) Cost of capital may be in a downward swing. 2) l:ittl:e or no information is given on how the Company's purported adjusted value rate base was derived. 3) It is.unlikely that there has been a sharp decline in the rate of return in the last 18 months. How have they survived? 4) Utilities should not be given the liberty requested in this application by Entex--- especially small towns. J RW/ tmt Respectfully submitted, ~~, . ~r~ i 11 ~1/~Z- ~ ~ ~ L ,r :` ames R. Watkins, Rate Analyst Department of Public Service