Appeal from the Order of the Pennsylvania Public Utility Commission in case of Pennsylvania Public Utility Commission v. The York Water Company, R-77110517.
W. Russel Hoerner, with him Michael W. Gang; Morgan, Lewis & Bockius; William H. Kain, and Kain, Brown, Roberts & Woodbury, for petitioners.
John A. Levin, Assistant Counsel, with him George M. Kashi, Chief Counsel, for respondent.
President Judge Bowman and Judges Crumlish, Jr., Mencer, Rogers, Blatt, DiSalle and Craig. Judges Wilkinson, Jr. and MacPhail did not participate. Opinion by Judge Crumlish, Jr. President Judge Bowman and Judge DiSalle did not participate in the decision in this case.
The York Water Company (York)*fn1 appeals here from an order of the Public Utility Commission
(PUC) which denied in part its request for rate increases. We affirm in part and remand in part.
On November 28, 1977, York filed Tariff Water-Pa. P.U.C. No. 13 proposing a January 27, 1978 addition to rates, designed to produce an increase of $1,680,054 in annual operating revenues based upon the level of operations at July 31, 1977, the end of the test year.
With the operation of the tariff automatically suspended, formal investigation ordered, and public hearings held, the Administrative Law Judge recommended that York be permitted to file tariff revisions providing annual operating revenues of $5,814,964, an increase of $964,338 over then-existing revenues, $715,716 less than proposed. Providing an income available for return of $1,827,000 after expenses, taxes and depreciation, the recommendation contemplates a fair value rate base at an original cost figure of $19,030,131 with a corresponding 9.6 percent rate of return.
In its final adjudication,*fn2 the PUC order finds a fair value rate base of $23,387,000 and a fair rate of return of 7.88 percent, providing income available for return in the amount of $1,843,000. This adjudication directs York to file tariff revisions, providing annual operating revenues of $5,862,355, an increase of $1011,729, but $671,933 less than York's proposed figures.*fn3
York now appeals the PUC's determinations with regard to fair value, fair rate of return and capital structure's cost of common equity capital*fn4 in that they are contrary to the record and principles of law, constitute an arbitrary and capricious denial of the constitutional rights of due process and protection from property ...