[BETA] Fortnightly

The Arkansas Court of Appeals has upheld a decision by state regulators permitting Arkansas Louisiana Gas Co., a natural gas local distribution company, to allocate the total amount of a recent rate increase to residential users. According to the Arkansas Public Service Commission (PSC), applying the entire $4.9-million increase to residential users was an appropriate means of preventing system bypass by larger customers, consistent with prior efforts at removing interclass subsidies. (See, Re Arkansas Louisiana Gas Co., a division of Arkla, Inc., 150 PUR4th 333 (Ark.P.S.C. 1994).) The court rejected claims that the bypass risk associated with larger customers justified a higher return from that class, concluding that the record in the case supported the PSC's policy goal of retaining large customers for the benefit of the system as a whole. The court cautioned, however, that its decision should not be read as "advocating an inexorable march" toward absolute equalization of class rates of return. It said that utility shareholders must share responsibility for business risks, leaving ratepayers unharmed where imprudence on the part of the utility causes a loss of industrial users. Arkansas Louisiana Gas Co. v. Arkansas Public Service Commission, No. CA 94-487, Aug. 30, 1993 (Ark.Ct.App.)

Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.