Gas utilities and state commissions must work together to help preserve rates of return, encourage conservation, and lower customers’ bills.
Rate Base Adjustments Not Needed in Stable Economy
Citing a "relatively stable economy," the Utah Public Service Commission (PSC) has reaffirmed its preference for a historical test period in setting utility rates. It rejected a proposal by Mountain Fuel Supply Co., a natural gas local distribution company (LDC), to employ a projected test year in its current rate case. The LDC argued that the adjusted expense and revenue figures would better reflect customer growth as well as the effects of a newly established early retirement program. According to the PSC, the company had earned in excess of its authorized rate of return in three of the last four years, without the type of post-test-year adjustments proposed in the new rate case. The PSC also concluded that while restructuring in the gas industry would support test-period adjustments, all such adjustments were made during the LDC's last rate case. Re Mountain Fuel Supply Co., Docket No. 95-057-02, Apr. 10, 1995 (Utah P.S.C.).
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