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DEC 111979 avox 42' pAcE275 <br />MR. FANCHER STATED THAT HE USED AVERAGE INVESTMENT TO <br />CALCULATE THE RATE BASE BECAUSE THAT WOULD MORE CLOSELY APPROXIMATE <br />A TOTAL DOLLAR INVESTMENT THROUGH THE TEST YEAR 1978 AS OPPOSED TO <br />THE YEAR END INVESTMENT, WHICH WAS CONSIDERABLY HIGHER. HE EXPLAINED <br />THAT THE AVERAGE INVESTMENT ATTEMPTS TO RELATE THE AVERAGE INVESTMENT <br />IN DOLLARS THROUGHOUT THE YEAR COMPARED TO THE AVERAGE COST AND <br />REVENUES PRODUCED THAT YEAR TO SERVE THE CUSTOMERS THAT WERE THERE <br />ALL YEAR THROUGH. <br />CHAIRMAN WODTKE COMMENTED THAT THEY WERE TALKING ABOUT <br />TAKING A FACTOR OUT FOR FUTURE PLANT USE AND TOOK 1977, 1978 AND <br />3 MONTHS OF 1979 AND FACTORED THESE FIGURES IN TO COME UP WITH A <br />USABLE PORTION. HE ASKED IF IT WAS NOT TRUE THAT THERE WAS A MORATO- <br />RIUM IN 1977 OR 1978 AND NO ONE COULD HOOK UP. <br />MR. FANCHER STATED THAT HE HAD NO KNOWLEDGE OF ONE. <br />CHAIRMAN WODTKE THEN INQUIRED AS TO THE NUMBER OF CUSTOMERS <br />WHO HAVE HOOKED ON SINCE MARCH OF 1979, AND MR. FANCHER FELT THAT <br />MR. VAUGHN WOULD HAVE A BETTER IDEA OF THIS. <br />COMMISSIONER LYONS COMMENTED THAT MR. VAUGHN STATED THAT <br />ALL FORCE MAINS WERE CONSIDERED USED AND USEFUL, BUT DID EXEMPT SOME <br />OF THE LINES IN OTHER CATEGORIES. HE ASKED WHY ALL FORCE MAINS ARE <br />CONSIDERED USED AND USEFUL AND NOT EXEMPTED. <br />MR. FANCHER FELT MR. VAUGHN COULD ANSWER THIS BETTER, AND <br />COMMISSIONER LYONS THEN NOTED THAT TO GET THE AMOUNT OF MONEY THAT <br />GOES INTO THE RATE BASE, MR. FANCHER USED FACTORS CALLED "HISTORICAL <br />COST PER FOOT It AND ASKED HIM TO EXPLAIN THIS. <br />MR. FANCHER AGAIN FELT MR. VAUGHN COULD MORE PROPERLY <br />ANSWER THIS, BUT EXPLAINED THAT THERE IS A BASE ESTABLISHED WHICH, <br />IN THIS -INSTANCE IS A 4° MAIN, AND THEN ALL THE OTHER RELATIVE COSTS <br />OF THE DIFFERENT SIZE LINES ARE COMPARED TO THAT BASE AMOUNT, <br />CHAIRMAN WODTKE DISCUSSED THE FIGURES USED TO COMPUTE THE <br />BASE AMOUNT AND ASKED,IF THE LINE HAS BEEN IN THERE SINCE 1960, DID <br />THEY USE THE RELATIVE COST OF THAT LINE TODAY OR THE COST OF IT 10 <br />YEARS AGO AND DEPRECIATE IT, AND MR. FANCHER WAS NOT SURE OF THE <br />ANSWER TO THAT (QUESTION. <br />- 30 <br />