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MR. GATLIN ANSWERED -THAT THE TESTIMONY OF MR. MULLE IS TECHNICAL IN NATURE AND THAT HE WILL ASK MR. MULLE TO SUMMARIZE THE TESTIMONY SO THE BOARD WILL KNOW WHAT THE EXTENT OF HIS RECOMMENDATIONS ARE. CHAIRMAN WODTKE SAID HE FELT THE POINT ATTORNEY COLLINS IS TRYING TO MAKE IS THAT THIS PARTICULAR INFORMATION HAS NOT BEEN PRO- VIDED TO THE BOARD PREVIOUS TO THIS TIME, BUT INFORMED MR. GATLIN THAT HE MIGHT PROCEED IN ANY MANNER HE WISHED. MR. MULLE STATED THAT HE IS PRESIDENT OF HIS OWN ECONOMIC CONSULTING FIRM WHICH SPECIALIZES IN UTILITY RATE -OF -RETURN PRESENT- ATIONS TO VARIOUS GOVERNMENTAL AGENCIES. HE STATED THAT HE HAS PRE- SENTED TESTIMONY BEFORE 28 REGULATORY COMMISSIONS FROM COAST TO COAST AND BEEN ACCEPTED BY ALL OF THEM AS AN EXPERT WITNESS. MR. MULLE CONTINUED THAT HIS TESTIMONY IS TO SUPPORT THE RATE OF RETURN OF 10.9%. HE STATED THAT HE DETERMINES THE MIX OF CAPITAL BETWEEN DEBT AND EQUITY AND THEN ASSESSES THE LONG TERM DEBT AND COMMON EQUITY. MR. MULLE WENT INTO A DISCUSSION OF THE OVERALL COST OF CAPITAL. HE POINTED OUT THAT THIS TESTIMONY WAS PREPARED IN THE LATTER PART OF 1976 AND HELD OVER UNTIL 1977 FOR PROCESSING. AT THAT TIME ONLY IN- FORMATION FROM 1975 WAS AVAILABLE, AND THIS INFORMATION MUST BE CON- TINUALLY UPDATED. MR. MULLE INFORMED THE BOARD THAT THE PREPARED TESTIMONY PRESENTED GOES INTO A GREAT DEAL OF DETAIL AND STATED THAT. HE WOULD SWEAR TO ALL THE STATEMENTS CONTAINED THEREIN. IN CONCLUSION, HE STATED THAT HE BELIEVED THAT A REASONABLE RATE OF RETURN SHOULD BE BETWEEN 10-1/2 AND 11%. CHAIRMAN WODTKE NOTED FOR THE RECORD THAT HE HAS RECEIVED THE •FOLLOWING LETTERS OPPOSING THE PROPOSED RATE INCREASE WHICH HILL BE RECEIVED AS EXHIBITS AND MARKED AS FOLLOWS: 4-A--R._L. LUCKENBAUGH 8/2 4-B - HENRY LEHAAN 8/30 4-C - MR. & MRS. PHILLIP A. YOUNG 8/30 4-1) - RONALD FAULKINHAM 8/24 4-E = GEORGE E. BULTEZ 9/7 4-F - MURRAY REESE 8/27 4-G - ERNESTINE PARK 9/7 3 33 SEP 14 1977 P�3bK �, PdGr