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Show PSCU Grants Utah Power Revenue Increase Ths Public Service Commission of Utah issued an order granting Utah Power & Light Co. an increase in annual revenue of $19,135,000 or an increase of 13.86 percent on total revenue. The increase will apply to all general service classes of customers. The commission order read, "In the case of an electric utility serving a growing population this means that it is vital for it to build new generating plants. . .this means the utility must secure additional capital from those that are willing to invest in its facilities. In order to sell securities at a reasonable cost, the utility's earnings must be kept at a level that will satisfy prospective investors of its financial stability." Overall, the commission granted 94.4 percent of the amount requested. The commission recognized the total year-end investment in plant, rather than an average amount that had been used in previous rate cases. Alio recognized was the increase in the cost of underground mining brought about by recent union contracts, and an increase in embedded costs. The total amount granted also includes a surcharge of $3,407,000 to cover the cost of replacement energy for the third unit at the company's Naughton Plant which had a mechanical failure in November, 1974. That surcharge will end no later than December 31 of this year. The commission order, which will become effective only six weeks after the utility had applied, did not allow a higher rate of return on equity but only to cover costs mentioned above. In September, 1974, the PSC of Utah granted UP&L a 17.S percent increase in annual revenue amounting to $18.8 million. That increase gave the company a rate of return applied to the rate base of 8.63 percent and a return on equity of 13.25 percent in Utah. "This order enables the company to continue its construction program on schedule for the present," E. A. Hunter, president of the utility, observed. UP&L serves approximately 297,000 customers in Utah and receives about 84 percent of its revenue in the state. |