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Show Public hearing held on proposed rate increase by Utility Company A public hearing called by the Public Service Commission of Utah was held in Cedar City Tuesday to consider testimony in a proposed application by California-Pacific Utilities Company to pass along purchase power adjustment increases. Testimony in behalf of the company was presented by Richard Jarrett, rate engineer for California-Pacific. In testimony before the commission Jarrett reiterated the company's request to pass along the increased cost of electric energy purchased from Utah Power and Light Company to electric customers in the Cedar City .district, including Iron and Washington Counties. 1 The need for additional funds is a result of a charge for fuel adjustment that has been charged by Utah Power and Light since June 1975, and that based on billings in November amounted to $.00109569 which is N vjected to an additional i -,131 or 11.6 percent increase in .nnual purchase of power costs. In a Nummary statement for the company legal council Grant Macfarlane, eluded to three issues of the1 hearings that the company felt important. The first point was that during the past nine months the fuel adjustment cost bas amounted to $70,000. Question as to why Kanab sections is not included in the request to absorb the increase dealt with the fact that power for that operation is purchased from another source, Garfield Kane, that currently ' under construction con-struction are transmission lines that will serve only those in the Cedar City district and that the 1 power purchase includes only the Cedar City area. The company presented two methods of pass through costs of the fuel adjustment. The first, and recommendation of the company, was that the cost increase in-crease in energy related and should be passed on as it is received, on the basis of a flat rate for each Kilowatt hour used. r The second alternative would be that the cost be passed through on a percentage basis. Although additional written testimony may be submitted through Monday, March 22 at 5 p.m., a brief summary was also made at the hearing by the council for the Commission, Blaine Davis. Davis expressed concern that the request to recover money already spent during the past several months since the fuel adjustment costs began to flow, lould in effect be construed as ' proving a retroactive rate increase that would be contrary to state law. He a'Jso pointed out that since the fuel adjustment is a variable ' from moi to month and not a fixed cost that any increase should be looked at from the standpoint of authority to review and with the possibility of a year-end year-end adjustment, if in fact the actual cost is less than the estimated costs in the request. The council also expressed concern over the fact that the increased cost was hot being considered over the total operation in Utah-it eliminates Kane County-despite the fact that the cost of power varies and is purchased from two different sources. He suggested that total operation costs and overhead are difficult to separate. He also suggested that the council would probably recommend to the Commission that the request for increase , ihpulkd be based on actual power p"b6Bhases during 1975, rather than' A74 as included in the proposal More power was actually ac-tually marketed in 1975 and would hate the effect of spreading Ch costs over a greater area, although he acknowledged, that the difference dif-ference would be minimal. Davis was not prepared, at the hearing to make a recom-mendation recom-mendation on how much of an increase, if approved, should be passed on. A formal presentation was submitted into evidence at the hearing by Jess Pickett, in behalf of the Parowan, the Cedar City and the Beryl Pumpers Association. The presentation was in the form of a protest-a protest particularly against the flow through of the costs on a use basis rather than a percentage basis. Citing the decision of the Commission in June of 1975 as having authorized a rate increase in-crease to California-Pacific at that time, based on percentage rather than per unit cost. "Since we feel that this request by the company is on the same basis as the last pass through hearing, we do feel that the principles are still the same and still apply to this rate request," Pickett stated. As we did last June we feel that perhaps a complete rate study should be made on the rate structure and earnings of Cal Pac. We find in a recent press release . . . that a cash dividend of approximately 11.11 percent was paid to the stockholders during the year of 1975, and in addition to this there is over 14 million dollars in a retained earnings account. . . and also an increase of assets during this period. So, the question comes to our mind, 'what is the total return to stockholders and what is a fair return to stockholders.' This item we ask you to consider. "Other factors to consider that was not presented in the company's com-pany's report is the operations for the year of 1975 and also the sale of the Hurricane properties and how it will effect the kilowatt demand. What influence do those items have on this rate increase request," Pickett's prepared statement asked. In attendance at the hearing were approximately 35 people. Additional opposition and questions regarding the request for an increase were entered into the record and will be taken under consideration by the commission, it was indicated. Following the deadline for written testimony of Monday, March 22 the, company will have a five day period to respond. |