OCR Text |
Show c: akf Yibunc s4 lion PSC Begins Hearings On UP&L Bid for Immediate Rate Hike By Con Isarras TllbuilC Staff WiiUt Ctah Bower & Light Co. offered testimony Friday in support of its request for the largest rate increase a boost of in the utility's history $104 million of which UP&L wants $90 million immediately as interim relief Hearings before the Utah Public Service Commission drew dozens of protesters who complained that the interim rale ini lease, if granted, would force a growing number of unemployed Claims, and elderly citizens and others on fixed incomes, to go without lights and power during coming winter months. But UP&L officers argued the rate boost is necessary to keep the power company on sound financial footing. The utility claims it is paying more money as dividends to stockholders than it is currently earning, and that ratio needs to he balanced in order to preserve the utility's status in the financial community 'Cost of Capital "The company is currently not .we earning its cost of capital. aren't earning our dividends, said Ornn T. Colby, the UP&L assistant comptroller who testified before the commission. The PSC has scheduled further hearings for March to gauge the amount of the rate increase the utility will receive, and the Friday hearing dealt primarily with whether UP&L should be granted an interim rate increase, and if so, how much of a rate boost should it receive. Termed Arrogant Mr. Colby said if an interim rate increase isnt authorized, the company will continue to lose capital and will not be able to show investors that it can recover the costs of new power generating facilities. UP&L contends that the lions share of the rate increase will for go to recover expenditures capital construction and to meet cost increases resulting from . Dinar Devalued By Yugoslavia BELGRADE, Yugoslavia (AP) The government devalued the Yugoslav dinar by 20 percent against Western currencies Friday, a move designed to boost exports and make Yugoslav goods more competitive abroad. It said one reason for the decision a decline on international was markets of Yugoslavia's competitive potential. National bank quotations published Friday under the devaluation showed one US. dollar was worth 63.41 dinars The Yugoslav currency lost nearly 30 percent in value against the dollar in the last year. TEN MOST WIDELY FOLLOWED STOCKS IN UTAH I'ilJCC I II Prime Cut to 11.5 At Chemical Bank - The hefty rate increase proposal was termed arrogant" by members of a citizen's group that marshaled its members into the PSC's hearing room to testify about the harmful social effects" of the requested rate increase. "With the economy the way it is, it isnt fair for UP&L to ask for a rate increase at this time, said Nathan Goodman, one of about 100 members of Stand United for Rate Fairness, a citizens coalition that has opposed utility rate increases. LPCM, Cimarron Suit Seeks to Bar Merger A suit filed Friday in U.S. District for Utah seeking to block and postpone a possible merger of United Park City Mines Co. and Cimarron Corp. charges that there were omissions and misrepresentations in the solicitation of proxies. The suit seeks at least a injunction barring a planned Oct. 28 vote by UPCM shareholders concerning the merger. The suit was filed late Friday afternoon by Bamberger Investment & Exploration Company Inc . Bamberger Company and Park y Service Study The hearings came immediately before the PSC begins sifting through a variety of issues tied to a UP&L cost of service study which suggests alterations in the method the utility uses to charge its various customers for power. UP&L has suggested in that case, separate from the rate increase matter and scheduled to go before the PSC next Monday, that residential bills be increased by about 14 percent and that industrial bills be lowered by about 17 percent. Those alterations in the allocation percentages would have effects above and beyond any individual rate in- City Metal Mines Corp., which own 3 percent of the UPCM shares Among the misrepresentations alleged by the suit is a statement that the UPCMs largest shareholder, Atlantic chfield Co. with 18.3 percent, favors the merge- -. Even if the representation that it was anticipated that Atlantic Richfield Company would vote in favor of the merger was true when made, it is no longer true and defendants know it is no longer true and hence defendants have a duty to correct such representations, the suit reads. percentage points since summer. Another source of funds, loans from the Federal Reserve system, cost 9 a percent interest, down from 12 percent in July. The decline in interest rates has been a key factor in the stock market's strong rally that began in Stock trading has been the prsopect of improved by buoyed finances for the nation's businesses because of declining borrowing costs The prime rate is the base upon which banks compute interest business charges on short-terloans. The biggest and most creditworthy corporate clients often borrow at below the prime rate. Small business typically pay one to two percentage points above the prime rate Consumer Rates Higher Consumer rates tend to lag considerably behind the prime. Consumer loans average three years, and banks want to guard a gainst commitments to lung-leiiloans in a time of volatile interest rates that can as quickly turn upward as they can dip. The prime rate reached a record 21.5 percent in December 1980. ii Stock Market Ends Mixed, Blue Chips Down - NEW YORK (AP) The stock market finished mixed Friday after some late selling squelched hopes that the Dow Jones industrial average might make a run at a record high. The closely watched average of 30 blue chips, up more than 9 points at midday, closed with a 5.52 loss at creases 1,031.46. both UP&L proposals are granted by the PSC, average residential electric bills could jump by more than $10 a month. The utility says it requires additional revenues through customer rates to balance its ratio of dividends paid per share of company stock with the company's actual earnings Financial Stability What the imbalance of dividends to earnings per share issue does, according to the Friday testimony, is create a looking glass into the overall financial stability of UP&L. Mr. Colby told the PSC that the company, in September, paid dividends that were 130 percent of what the company earned per share. "But Assistant Utah Attorney General Craig Rich, representing the Utah Division of Public Utilities, commented that the market value of UP&L common stock is higher than its actual book value a situation that portrays UP&L as a healthy and attractive company for private investment. But Mr. Colby, quibbling with Mr. Richs analysis, maintained that ratio the high div is a warning sign" to potential the company is investors that perhaps in some financial trouble. If NEW YORK (AP) Chemical Bank, the nation's sixth largest bank, won cheers from the Reagan administration Friday by cutting its prime leading rate to the lowest level since September 1980. The drop from 12 percent to 11 5 percent was the latest in a senes of cuts in the banking industry's key . business borrowing rate since when the prime rale stood at 16 5 percent. Other big banks held at the 12 percent level Vice President George Bush and Commerce Secretary Malcolm Baldridge telephoned congratulations to Chemical Chairman Donald C. Platten, a bank spokesman said. The spokesman, who asked not to be identified, said he did not know precisely what was said Other Rates Low Jeffrey R. Leeds, a money market economist for Chemical, said the bank decided to cut its prime rate because of the continuing low levels of other interest i ales. A key source of bank funds borrowed excess reserves of other banks, known as federal funds were trading at an interest rate of 9 percent Friday, down almost six mid-July- Three public witnesses were allowed to give brief testimony Friday on what they perceived to be the effects of an interim rate increase. Lester J. Nielson, testifying as an individual ratepayer, asked the PSC to suspend all utility rate increases until after the Utah Legislature convenes next January. He proposed that the PSC, in lieu of granting the UP&L proposal, undertake studies geared at eventual orders for rate decreases. idends-to-earning- 23, 1982 Saturday Morning October The Dows peak closing high of was reached Jan. 11, 1973. Prices Rose Early But advances outnumbered declines by about 3 to 2 on the New York Stock Exchange. Bank and transportation stocks were particularly strong. 1,051.70 The Market In Brief New York Stock Exchange Oct. 22, 1982 UP VOLUME 1,014 101,120,000 SHARES Prices rose in the early going New Yorks Chemical Bank cut its prime lending rate from 12 to 11 Vj percent, putting the benchmark rate at its lowest level in more than two years. Analysts said traders became increasingly preoccupied, however, with a guessing game over whether the Federal Reserve might announce a reduction in the discount rate. Hopes for such amove seemed to fade as the session passed. By late in the day, the central bank had made no change in the rate it charges on loans to financial institutions, which stood at 9 percent Begin Rumors Unsettling Brokers also said rumors that some harm had befallen Prime Minister Menachem Begin of Israel unsettled the market late in the session. Begin aides in Tel Aviv said there was no truth to the rumors. Even with Fridays decline, the Dow Jones industrial average finished the week with a net gain of after 38.36 risen points. Since Aug. 12, it has 254.54 Among banking issues, Citicorp climbed l7 to 38 ; Bankamerica ' to 23 A ; Chemical New York 3i to 42; First National Boston IV4 to to 32:4; and Chase Manhattan 1 54 Vi. Bank stocks lagged behind in the early stages of the market's upsurge because of worries about the international financial system, but have since rallied. Rails, Airlines Rails and airlines, also relative latecomers to the rally, helped push the Dow Jones transportation average up 9.89 points F riday to 439.37 a gain of better than 2 percent. On the downside, E. F. Hutton dropped 1 Vi to 40l4. The research director of the firms brokerage house subsidiary and two other top analysts resigned and took similar jobs at a competitor, Baclie Group. Eastman Kodak, subject of a secondary offering of almost 3 million shares, dropped 2 Mi to 92 V4. Among other actively traded blue chips, International Business Machines lost 1 to 82 and American Telephone & Telegraph was off G at 605'8. Big Board Volume Volume on the Big Board totaled 101.12 million shares, against 122.46 million Thursday. Nationwide turnover in NYSE-listeissues, including trades in those stocks on regional exhenages and in the market, totaled 119.49 million shares. d Standard & Poors index of 400 industrials dropped .54 to 154.94, and S&Ps composite index v as down .23 at 138.83. k Vandals Damage Postal Vehicles FRANKFURT, West Germany Vandals sloshed gasoline over five German postal vehicles early Friday and set them ablaze, the third such attack in the city this week, police said. (AP) A DOWN 659 N.Y.S.E. Index s S &P. Comp 79,68-0- .04 138,83-0- ,23 Dow Jones Ind 1,031 .465.52 Associated Press Chert SB32Q CCGUBB O GSOTaSTOB The typical gemstone is marked up five times between the mine and your hands: GEMSTONE INTERNATIONAL brings you sapphires, rubies at a fraction of retail. stones Imagine ou could go to Sri Lanka and buy precious and direct from the mine. Youd save hundreds of dollars. Now youll have this opportunity right here in Salt Lake City. Gemstone International is offering a ehotee selection of precious and stones, mounted and semi-precio- semi-precio- J unmounted L -- - -r G0 Marriott Hotel October Business hours: 22-2- 3 Friday-Saturda- y, 07 OuEt?& 9 to 9 GEMSTONE INTERNATIONAL Last Day Saturday! Ciutot pdng v4iidjld VISA Amtoten lipitu csd Kttpltd V. J |