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1 for water operations is $40,000.00. Column 4 shows the <br />2 additional operating revenues which would be derived from <br />3 the implementation of the proposed rates if those proposed <br />4 rates had been in effect during the test year. These <br />5 additional revenues would result in total operating revenues <br />6 of $52,000.00 for the year which would reduce the operating <br />7 loss to $10,000.00 for water operations. Column 6 shows the <br />8 additional revenues that would be required to increase the net <br />9 operating income enough to provide a fair rate of return on <br />10 the investment rate base. Page 2 of attachment 2 shows the <br />11 same computations for the sewer operations for the test year. <br />12 Total revenues received during the year were $12,000.00 with <br />13 the corresponding figure for total expenses of $73,000.00 <br />14 which resulted in a net operating loss of $61,000.00. Column 2 <br />15 contains adjustments for property not considered used and useful <br />16 which reduces the operating loss by $15,000.00. Column 4 shows <br />17 the requested increase in revenues of $12,000.00 which would <br />18 result from the proposed rates if they had been in effect <br />19 during the test year. This would result in a net operating <br />20 loss of $35,000.00. Column 6 shows those revenues that would <br />21 be required to provide a return on investment of 14.68% which <br />22 was the amount that was computed to be a fair rate of return. <br />23 <br />24 Q. Mr. Fancher, would you please provide us with an explanation <br />25 of how you determined the additional revenues that would be <br />26 derived from the new rate structure. <br />27 A. Yes. Included in Exhibit "3" is a detailed analysis of all <br />DEC 11.1979 oK V QAcE 270 <br />