2024-11-25 1250 Oceanside LLC Response to PD

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Application of Hawaii Elec. Light Co., Inc.,60 Haw.625 (1979) 594 P.2d 612 refund of any excess.See Friends of the Earth v.Public Service Commission,78 Wis.2d 388,254 N.W.2d 299(1977). Generally, however, more than a mere revenue deficiency is necessary to warrant a temporary rate increase. Kansas- Nebraska Natural Gas Co.v. State Corporation Commission,217 Kan. 604,538 P.2d 702(1975). 5 In Decision and Order No. 4123 the Commission stated at p. 24: First of all,it logically and legally follows that if the Company had not filed a request for a rate increase in January,1975, it would still be entitled to an 8.95%Return since that return was authorized in 1974. Since no docket was ever initiated to reduce rates or the rate of return,we assume that the 8.95%Return would still be in effect today.By seeking further rate relief in January 1975, the parties maintain that the Company must again justify the return that was authorized in 1974 with facts to support the 8.95%Return as being in accord with the test enumerated in the Bluefield and Hope cases, supra. And the Commission further stated at p. 25 of that decision: However, this Commission can take official notice of its decision that it had granted the Company a rate of return of 8.95%As being just and reasonable in May 1974. 6 The reasonableness of the rate structures of the other customer classifications was not appealed. 7 Thus the Commission states at p. 28 of its decision and order: The HELCO witness testified(and the Division witness did not disagree)to the following important principles of rate design: the recognition of the load factor in allocating fixed costs between the energy and demand components; the necessity of a customer charge; the expense and impracticability of time-of-day metering for HELCO's system; the undesirability of establishing a lifeline rate at this time;the objections to the inverted rate structure(where the price per unit increases as the quantity of the service taken increases);the difficulty of measuring the price elasticity of electricity; encouragement of conservation of energy by rate design;and the general conclusion that the design of fair and reasonable rates is not a science and involves informed judgment based upon extensive knowledge and experience. 8 See pp. 29-30 of the Commission's decision and order. 9 In its Order 4205,the Commission stated at pp. 2-3: The testimony revealed that Dr. Wells, from Washington D.C. knew almost nothing about the Island of Hawaii and very little of HELCO's system.At the time he testified he had not seen or inspected HELCO's system Dr. Well(sic),by profession,was an economist and his central thesis on rate-making was to apply the theory of short-run marginal cost. This theory,he testified could be applied to all utilities at all times and at all places without regard to the particular fact situation. . . . After emphasizing the importance of elasticity of demand,Dr. Wells could not indicate what role price elasticity would have in applying short-run marginal costs to rate making. In applying the short-run marginal costs,Dr. Wells also admitted that the range of error in his calculations with respect to these costs (average marginal cost,peak marginal cost)were 162/3 to 22%. If the 22%Factor were utilized,he confessed that it possibly could exceed the total increase HELCO was seeking in this case. 10 An"ultimate"fact is usually cast in the statutory language. 2 Cooper, State Administrative Law 466(1965). 11 For example,the average cost of 100 kwh=9.10 per kwh 300 kwh=7.20 per kwh WESTLAW CD 2024 Thomson Reuters. No claim to original U.S. Government Works. 14