Control Number : 3261
Item Number: 1
Addendum StartPage : 0
.
DOCKET NO. 3261
APPLICATION OF COLEMAN COUNTY
ELECTRIC COOPERATIVE, INC. FOR
AUTHORITY TO INCREASE RATES
WITHIN COLEMAN, RUNNELS, CONCHO,
TOM GREEN, BROWN, CALLAHAN,
TAYLOR, AND COKE COUNTIES
PUBLIC UTILITY COMMISSION
OF
TEXAS
EXAMINER'S REPORT
Procedural History
On May 28, 1980, Coleman County Electric Cooperative, Inc. submitted to the Commission
for approval several revised tariff sheets which had the apparent effect of adjusting the
Co-op's rates to increase revenues to a level previously approved by the Commission in
Docket No. 2293 - Application of Coleman County Electric Cooperative, Inc. (F. 0. 3-2879).
Following a prehearing conference in this docket held on June 6, 1980, the Commission
Staff determined that the tariff sheets alone would provide an insufficient basis for the
revenue request presented and so advised the Co-op that a formal application should be
filed.
On August 19, 1980, the Co-op filed an application for authority to increase rates for
its customers residing within Coleman, Runnels, Concho, Tom Green, Brown, Callahan, Taylor,
and Coke Counties. The Co-op proposed to increase its revenues by $323,210, a 14 percent
increase in adjusted gross operating revenues for the test year. By Order dated September
11, 1980, the Examiner suspended the Co-op's proposed rates for 120 days beyond the stated
effective date of October 1, 1980, and set interim rates for the Co-op based on the Staff's
finding that immediate relief was warranted.
A hearing on the merits of this docket was
held on October 23, 1980, at which Lynn Nabers represented the Co-op and Mike Blanchard
represented the Commission Staff. Evidence concerning this application was taken from both
the Co-op and the Staff.
This Examiner's Report is based on the filed record and the
evidence presented at the hearing.
Opinion
Coleman County Electric Cooperative, Inc. is an electric cooperative serving customers
within Coleman, Runnels, Concho, Tom Green, Brown, Callahan, Taylor, and Coke Counties. In
Docket No. 2293 (cited above) Coleman County was granted an increase in rates by the
Commission which was effective with bills mailed to customers August 1, 1979. However, due
to the increase in operating expenses in the past year and expected increases in future
years, the rates granted by the Commission will not produce revenue sufficient to enable
the Co-op to maintain its financial stability and to continue to provide dependable service
to its members.
At the hearing the direct testimony of the Co-op and the Staff was admitted by
stipulation and the Co-op presented one rebuttal witness, Mr. Jack Moss, who testified
about the elements of the Staff's case to which the Co-op took exception--a recommended
reduction in the Co-op's large power kw demand rate from $3.65 to $3.00, and the Staff's
recommendation that only a 4.4 percent return be allowed rather than the 5.8 percent
requested by the Co-op.
These two issues will be discussed in more detail (infra) but
first, attention will be given to a discussion of the Co-op and Staff positions on other
issues.
Docket No. 3261
Page 2
I.
Rate Design Proposals
Commission Engineer Kent Saathoff reviewed Coleman County's rate design proposals and
made recommendations concerning them in his testimony. He reported that the Co-op did not
prepare a fully distributed cost of service study for this case. Rather, the proposed
revenue increase was allocated to each customer class on the basis of each class's test year
base rate revenue, annualized for the rates approved in Docket No. 2293. This adjustment
was necessary since the rates were only in effect for three quarters of the test year. Mr.
Saathoff stated that a fully distributed cost of service study must be performed if rates
are to be cost based, and recommended that the Co-op include such a study in any future rate
filing.
He further stated that a future rate filing which did not include a cost of service
study would not be acceptable to the Commission Staff. However, since this rate request is
of an "emergency" nature, Saathoff testified that he was willing to accept the Co-op's
proposed allocation method.
Mr. Saathoff based his review of the Co-op's rate design proposals on comparisons to
other utilities, past Commission decisions, and impact on consumers, since no cost of
service study was available. The changes proposed by the Co-op included increasing minimum
charges for residential and small commercial customers by $1.00, thus raising their rates
to $5.75 and $7.50 respectively; increasing the minimum charge for cotton gin service from
$1.00 to $10.00 per horse power, per year; increasing the large power demand charge by $1.65
to $3.65 per kw; and increasing the energy (kwh) charge to recover the revenue not recovered
by other increased charges. Except for the large power demand charge, Mr. Saathoff found
these increases in customer charges and minimums to be reasonable and comparable to those
charged by other utilities. He recommended, however, that the irrigation class receive no
increase in rates to avoid over-recovery of revenue from this class of customers.
Mr. Saathoff's objection to the Co-op's large power demand charge increase was based
on his opinion that an 80 percent increase was unreasonable in its impact on customers. He
proposed instead that a $3.00 per kw demand charge be permitted.
In rebuttal to this recommendation Co-op witness Jack Moss testified that Coleman
County's purchased power contract with West Texas Utilities Company (WTU) requires the Coop to pay $3.17 per kw plus an additional $0.48 per kw for primary voltage service. Since
all but one of its substations receive power at primary voltage, Mr. Moss testified that
the kw charge is effectively $3.65. He further reported that Co-op revenues per kwh sold
(after power costs are paid) will be more uniform at the $3.65 rate than at the Staffproposed $3.00 rate. Finally, responding to Mr. Saathoff's customer impact objection, Mr.
Moss presented a chart showing the difference between customer bills at 20 and 50 percent
load factors comparing Co-op and Staff rates. Summarizing the results, he testified that
in his opinion the impact of the Co-op's rate on the 50 percent customer was insignificant
while the Staff's proposed rate would penalize the Co-op by permitting underrecovery from
low load factor customers.
Docket No. 3261
Page 3
The Examiner agrees that based on the Co-op's charted comparisons, the Staff rate
could appear to provide a smaller revenue excess over purchased power costs for the Co-op
from 20 percent than from 50 percent load factor customers. However, in view of the lack of
any demonstrated cost basis for the Co-op's rates, and the compounded uncertainty that the
revenue increase being recommended herein produces for the cost basis of these rates, the
Examiner believes that the impact of the Co-op's proposal on the large power customer
cannot be considered insignificant and that this impact should be a critical concern when
revenues are being increased. Accordingly, the Examiner recommends that the large power
(LP) rate be set at $3.00 per kw per month, that the Security Light (LS) rate be established
as proposed by theCo-op, and that the Co-op's other customer and demand charges be
established in accordance with Mr. Saathoff's recommendations.
The Examiner further
recommends that the energy charge for the Irrigation class remain at 1.75^ per kwh, and that
the remainder of the revenue increase recommended herein be allocated among the other
customer classes in accordance with the Co-op's proposed methodology, that is, by
increasing the kwh charge to recover revenue not recovered by the customer and demand
charges.
The Examiner recommends that the Co-op be ordered to file new tariffs incorporating
these rate design recommendations for review by the Commission
Staff prior to the
implementation of the new rates ordered by the Commission in this docket.
II.
Cost of Service and Invested Capital
Staff Accountant Stephen Bartley reviewed the Rate Filing Package filed by Coleman
County as well as their financial records and answers to Staff interrogatories. He then
prepared the Staff's recommended adjustments to the Co-op's test period cost of service for
the year ended March 31, 1980, and the invested capital at that same date.
These
adjustments and the Co-op's pro forma adjustment to test year amounts are shown in Exhibit 1
(attached).
Mr. Bartley's first adjustment, an increase of $27,336 to Operation and Maintenance
expenses, was composed of three separate items:
Payroll,
Workmen's Compensation and
General Liability, and Advertising and Contributions.
Coleman's payroll adjustment was based on two pay increases that became effective
January 1, 1980, and May 1, 1980. The Co-op did not take into account another resolution
passed by the Board of Directors at the April 1980 meeting. This resolution established a
new "Hours of Work, Overtime, and Stand by Duty" policy. The policy provides for two crews
(each consisting of two employees) to assume stand-by duty for one week at a time on a
rotating basis. Employees on stand-by would be paid, at time and one-half, for at least two
hours per day. Any hours actually worked over the two hours per day would be compensated
for at time and one-half.
Mr. Bartley annualized the August 31, 1980, base payroll to
consider the financial effects of this policy change and added an amount for the overtime
pay the Co-op will incur.
Docket No. 3261
Page 4
Mr. Bartley next increased Administrative and General Expense to reflect an increase
in workman's compensation premiums commensurate with the payroll increase described above.
And, he decreased advertising expense to eliminate all amounts in excess of the three
percent limit prescribed by P.U.C. SUBST. R. 052.02.03.032(a)(6).
Finally, Mr. Bartley
adjusted the Co-op's Other Tax expense to provide for the increase he made to payroll and
the expected FICA rate of 6.65 percent, and allowed $41 in interest on customer deposits.
The return allowed by the Staff as shown in Exhibit 1 was based on Mr. Jim Johnson's
recommendations which will be discussed below.
Mr. Bartley's other assignment in this case was to establish the value of the Co-op's
invested capital, and with only three minor changes he agreed with the Co-op's calculation.
His adjustments increased accumulated depreciation for rate-making purposes to synchronize
year end plant-in-service with the depreciation that would have been taken through that
date.
He also adjusted working cash in accordance with the Staff's' cost of service and
decreased customer deposits in accordance with the year-end amount.
Based on these
adjustments, Mr. Bartley recommended that Coleman's invested capital be set at $5,963,508
utilizing the following components:
Plant in Service
$8,886,606
Accumulated Depreciation
( 3,417,951)
Net Plant
$5,468,655
CWIP
Working Cash
Materials and Supplies
Prepayments
Customer Deposits
Property Tax
Total Invested Capital
206,567
130,804
133,947
43,420
(680)
( 19,205)
$5,963,508
III. Return
One of the two disputed issues in this case involved the amount of return to be allowed
in the cost of service. The Co-op requested that a 5.75 percent return be allowed on its
invested capital of $5,974,224, a return that Co-op witness Jack Moss testified would
result in a 3.97 TIER (times interest earned) ratio. According to Mr. Moss, the Co-op's
test year return was 1.41 percent while the adjusted test year return was only 0.35 percent.
In his opinion, these returns plus the 1.06 and 0.13 TIER ratios corresponding to them are
indicative of the very serious financial problems the Co-op is facing. He also reported
that, in his opinion, a 3.97 TIER is not unreasonable given the fact that the Co-op's
embedded interest rate is 2.0 percent.
Staff Economist Jim Johnson recommended that only a 4.4 percent return be allowed
based on his conclusion that the $343,519 return requested by the Co-op is not needed to
insure the Co-op's financial integrity and is in excess of the amount that would be required
by lenders.
Mr. Johnson agreed that the Co-op's financial position is deteriorating and
that at the end of 1979 its TIER was below the default level. He estimated that the Co-op
will
continue to be able to borrow funds from REA (the Rural Electrification
Administration) at a cost of 2 percent and testified that in his opinion a TIER range of 2.0
Docket No. 3261
Page 5
to 3.5 should be acceptable. Finally, he reported that he felt the Co-op's 10.47 percent
projected growth rate was overstated and that an 8.0 percent rate was more reasonable.
Using a 3.0 TIER resulting in a 27 percent equity level, and assuming use of a 17 year
capital credit rotation cycle and an 8.0 percent growth rate, Mr. Johnson determined that a
4.4 percent return should be required by Coleman to provide a cash flow for debt service and
equity maintenance with a surplus for capital credit rotation.
Further, his analysis
indicated that the return and TIER he feels are necessary for the Co-op will remain constant
or at reasonable levels through 1984.
Finally, Mr. Johnson reported that the return he was recommending was sufficient even
though it will not permit a 17 year rotation cycle, and he surmised that the Co-op's
financial position would improve if their very high line loss could be reduced.
In rebuttal to Mr. Johnson's testimony, Mr. Moss elaborated on his position that a
5.75 percent return was reasonable for the Co-op. Despite his defense of the 3.97 TIER
based on a 2.0 percent interest cost (supra), he said that he expected the Co-op to be a
concurrent borrower by the end of 1981. He also criticized Mr. Johnson's use of the Goodwin
formula to arrive at optimum equity and return rates, demonstrating that annual
requirements for patronage capital rotation will increase substantially above the amounts
Mr. Johnson utilized in his analysis. Finally, he testified that he thought Mr. Johnson's
assumption that the Co-op's rate of return would remain constant was unrealistic because he
expects operating costs to continue to rise.
The Examiner believes that there are several key factors to consider in evaluating the
opinion testimony of these two expert witnesses.
First, Mr. Moss importantly cites the
fact that Mr. Johnson's proposed return revenues may not be sufficient to rotate capital
credits on a 17 year cycle, despite the fact that this may be caused by large capital credit
allocations for the years 1963 through 1970. On the other hand, Mr. Moss's criticism of Mr.
Johnson's 2 percent debt assumption seems, at best, somewhat speculative and, at worst,
inconsistent with his defense of a 3.97 TIER ratio, a ratio he testified ". . . might seem
unreasonably high in an instance where the embedded interest cost of the Co-op was
considerably higher than 2Y". . . (Moss testimony, at 13).
Although Mr. Johnson's analysis is thorough, the Examiner believes that on the whole,
the optimum and projected criteria upon which he based his return recommendation appear to
be conservative.
And, while the Co-op has not committed itself to a 17 year patronage
capital rotation policy, it has expressed its desire to rotate if the surplus to do so is
available.
Finally, while they are higher than those proposed as optimum by Mr. Johnson,
the equity and TIER targets and overall return percentages proposed by the Co-op do not
appear unreasonable, particularly in light of the Commission's recent decisions indicating
an intent to question cooperative management and financial goals only when they appear
e minentl y unreasonable.
Docket
No.
2915,
Application of Bailey County Electric
Cooperative, Inc. 5 P.U.C. BULL. 495 (April 18, 1980).
Docket No. 3261
Page 6
Based on the cost of service stipulations discussed in this Report, allowing a 5.75
percent return on Coleman's invested capital would provide more revenue to the Co-op than
the $323,210 requested in the Statement of Intent and Petition for Authority to Change
Rates.
Accordingly, based on a finding that it is not reasonable to limit the Co-op to a
4.4 percent return, the Examiner recommends that Coleman County be allowed a dollar return
of $296,047, or a 4.96 percent return on invested capital as established herein.
This
recommendation is predicated on the Examiner's conclusion that the Co-op's return
percentage is reasonable but that the overall revenue increase allowed by the Commission
should be limited to the dollar amount requested.
As an explanation for the attached
Exhibit 1, the Examiner notes that Mr. Bartley's exhibit was prepared using the revenues
and expenses derived from the adjusted test year with the requested rate increase (as shown
on Schedule A1.0 of the application). The Co-op's Statement of Intent and Petition for
Authority to Change Rates, however, reflect not the revenue increase resulting from the
Schedule A adjustments but only the 14 percent increase over test year results. The
Examiner believes that to grant a revenue increase larger than that requested by the Co-op
as stated in the pleadings described above would violate long-established Commission policy
against allowing a rate increase larger than that requested by the utility.
IV.
Summary
The Examiner recommends that the Co-op be allowed to increase its revenues by $323,210
based on the cost of service shown on Exhibit 1. This recommendation incorporates the
revenue stipulations presented by the Co-op and the Staff and the Examiner's 4.96 percent
return recommendation.
These additional revenues should be allocated among customer
classes in accordance with the rate design guidelines recommended in this Report and
Coleman County should be required to file tariffs revised in accordance with the
Commission's
Order in this docket and receive approval for those tariffs before
implementing the new rates.
Findings of Fact
1.
On
May 28, 1980, and August 19, 1980, Coleman County Electric
Cooperative,
Inc.
filed documents constituting an application to
increase its rates by $323,210, a 14 percent systemwide increase slated
to become effective on October 1, 1980.
2.
Coleman is a distribution cooperative providing retail electric service
to consumers within Coleman, Runnels, Concho, Tom Green, Brown,
Callahan, Taylor, and Coke Counties.
3.
The rate increase proposed by Coleman is based on an increase in the Coop's operating expenses and a need to improve the Co-op's financial
position.
Docket No. 3261
Page 7
4.
The Co-op
stipulated
that it would accept
the Commission
Staff's
recommendations in this case except for the return recommended by Mr.
Johnson and the large power kw demand charge recommended by Mr. Saathoff.
5.
The Staff's evaluation of the reasonableness of the Co-op's proposed
rates was based on a comparison with rates of other utilities, recent
rate orders of the Commission, and a review of the impact the rates would
have on consumers since the Co-op provided no cost of service study in
support of its application.
6.
The large power kw demand charge recommended by the Staff is preferable
to that recommended by the Co-op because the cost of serving these
customers has not been sufficiently demonstrated to justify the Co-op's
higher rate and the magnitude of the impact on large power customers
appears unreasonable.
7.
The following monthly customer and demand charges are reasonable for the
Co-op based on the stipulation between the Co-op and the Staff and
Finding of Fact No. 6:
Class
Customer Charge
Residential
Small Commercial
Irrigation
Cotton Gin
Large Power
Lighting 175 watt
400 watt
$5.75 (with 20 kwh)
$7.50 (with 50 kwh)
8.
Demand Charge
$6.50/hp/year
$10.00/hp/year
$ 3.00/kw/month
$4.40
$7.55
It is reasonable to allocate no revenue increase to the Irrigation class
because increasing revenues recovered from this class would permit the
Co-op to overrecover from these customers.
9.
The Co-op's proposal to recover all of the revenue increase not recovered
through the customer and demand charges through the energy charge is
reasonable in this docket because of the Co-op's need for rate relief and
the lack of a fully-distributed cost study to serve as a more precise
basis for rate design.
10.
The Co-op's cost of service is $2,620,290 based on the following
components:
Purchased Power
Operation and Maintenance
Depreciation
Other Taxes
Interest on Deposits
Return
Total Revenue
$1,445,398
579,169
239,231
60,404
41
296,047
$2,620,290
Docket No. 3261
Page 8
11.
The Co-op's invested capital is valued at $5,963,508 based on the
following components:
Plant in Service
$8,886,606
Accumulated Depreciation
(3,417,951)
Net Plant
CWIP
$5,468,655
206,567
Working Cash
130,804
Materials and Supplies
133,947
Prepayments
Customer Deposits
43,420
(680)
( 19,205)
Property Tax
Total Invested Capital
12.
$5,963,508
A dollar return of $296,047, or a 4.96% return on the Co-op's invested
capital, is reasonable because it is no greater than the return necessary
to meet the optimum coverages and financial goals articulated by the Coop but is at the level necessary to prevent the Co-op from recovering
more than the $323,210 requested revenue increase set out in Co-op's
filed Statement of Intent and Petition for Authority to Change Rates.
13.
Based on the cost of service set out in Finding of Fact No. 10 as compared
with the Co-op's test year revenue of $2,297,080, and limited by the Coop's requested revenue increase, the Co-op has demonstrated that it has a
base rate revenue deficiency of $323,210
14.
The cost of service described above in Finding of Fact No. 10 is
reasonable because it includes only the Co-op's reasonable operating
expenses and provides no more than a reasonable return on the Co-op's
capital investment.
Conclusions of Law
1.
The
Commission
has
TEX.REV.CIV.STAT.ANN.
jurisdiction
over
this
matter
art. 1446c, S916, 18, 37-48
pursuant
to
(Supp. 1979) [the
Act].
2.
Pursuant to Section 39 of the Act the Commission has a duty to insure
that the rates charged by Coleman County are just and reasonable.
3.
A revenue increase of $323,210 is reasonable for Coleman County because
this is the amount the Co-op requested, and because the Co-op has
established that its cost of service is at least $2,620,290 while its
test period revenues were $2,297,080.
Docket No. 3261
Page 9
4.
The rates, rate design guidelines, and tariff revisions recommended by
the Examiner, if properly implemented, will produce rates which are just,
reasonable, and not unreasonably discriminatory.
Respectfully submitted,
'CAROLI N SKELLMAN
HEARINGS EXAMINER
APPROVED on thi s 1;,tLday of
P LI F. RI
S
DIRECTOR OF H RINGS
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DOCKET NO. 3261
APPLICATION OF COLEMAN COUNTY
ELECTRIC COOPERATIVE, INC. FOR
AUTHORITY TO INCREASE RATES
WITHIN COLEMAN, RUNNELS, CONCHO,
TOM GREEN, BROWN, CALLAHAN,
TAYLOR, AND COKE COUNTIES
PUBLIC UTILITY COMMISSION
OF
TEXAS
ORDER
In public meeting at its offices in Austin, Texas, the Public Utility Commission of
Texas finds that the above-referenced application was processed in accordance with
applicable statutes by an Examiner who prepared and filed a report containing Findings of
Fact and Conclusions of Law, which Examiner's Report is adopted and made a part hereof. The
Commission further issues the following Order:
1.
Coleman County Electric Cooperative,
Inc. 's application for a rate
increase is granted as set out in the Examiner's Report and the Co-op
is hereby allowed a revenue increase of $323,210.
2.
Coleman County shall revise its tariffs in accordance with this Order
and file four copies of this revised tariff with the Commission's
Filing Clerk within 20 days of this Order. The Commission Staff shall
have 20 days from the date of filing to review and approve or reject
the tariff.
The tariff shall be deemed approved and effective upon
the expiration of 20 days after filing or sooner upon notification
from the Commission Secretary. In the event the tariff is rejected,
the Co-op shall have 15 days to file an amended tariff and the same
review procedures shall again apply.
3.
The revised and approved rates shall be charged only for service
rendered in areas over which this Commission was exercising its
original jurisdiction as of the adjournment of the hearing on the
merits herein, and said rates may be charged only for service rendered
after the tariff approval date.
Docket No. 3261
Page 2
ORDER
4.
This Order is deemed to be final upon the date of rendition. Approval
of the revised tariff in compliance with this Order shall be deemed to
be final on the date of its effectiveness either by operation of this
Order or by notification from the Commission Secretary, whichever
shall first occur.
RENDERED AT AUSTIN, TEXAS, on the
day of
, 1980.
PUBLIC UTILITY COMMISSION OF TEXAS
SIGNED:
GEORGE M. COWDEN
SIGNED:
GARRETT MORRIS
SIGNED:
H. MOAK ROLLINS
ATTEST:
PHILIP F. RICKET S
SECRETARY OF THE COMMISSION
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DOCKET NO. 3261
APPLICATION OF COLEMAN COUNTY
ELECTRIC COOPERATIVE, INC. FOR
AUTHORITY TO INCREASE RATES
WITHIN COLEMAN, RUNNELS, CONCHO,
TOM GREEN, BROWN, CALLAHAN,
TAYLOR, AND COKE COUNTIES
PUBLIC UTILITY COMMISSION
OF
TEXAS
ORDER
In public meeting at its offices in Austin, Texas, the Public Utility Commission of
Texas finds that the above-referenced application was processed in accordance with
applicable statutes by an Examiner who prepared and filed a report containing Findings of
Fact and Conclusions of Law, which Examiner's Report is adopted and made a part hereof. The
Commission further issues the following Order:
1.
Coleman County Electric Cooperative, Inc. Is application for a rate
increase is granted as set out in the Examiner's Report and the Co-op
is hereby allowed a revenue increase of $323,210.
2.
Coleman County shall revise its tariffs in accordance with this Order
and file four copies of this revised tariff with the Commission's
Filing Clerk within 20 days of this Order. The Commission Staff shall
have 20 days from the date of filing to review and approve or reject
the tariff.
The tariff shall be deemed approved and effective upon
the expiration of 20 days after filing or sooner upon notification
from the Commission Secretary. In the event the tariff is rejected,
the Co-op shall have 15 days to file an amended tariff and the same
review procedures shall again apply.
3.
The revised and approved rates shall be charged only for service
rendered in areas over which this Commission was exercising its
original jurisdiction as of the adjournment of the hearing on the
merits herein, and said rates may be charged only for service rendered
after the tariff approval date.
Docket No. 3261
Page 2
ORDER
4.
This Order is deemed to be final upon the date of rendition. Approval
of the revised tariff in compliance with this Order shall be deemed to
be final on the date of its effectiveness either by operation of this
Order or by notification from the Commission Secretary, whichever
shall first occur.
^'!^p ^r
RENDERED AT AUSTIN, TEXAS, on the 27th day of
, 1980/
January
PUBLIC UTILITY COMMISSION OF TEXAS
SIGNED:
X
' OWDEN
SIGNED:
ARRET
SIGNED:
ATTEST:
.
PHI LI P F. RICK
^
S
SECRETARY OF T 19 COMMISSION
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^
H.
OR
^
9^
AK R LLIN
DOCKET NO. 3261
APPLICATION OF COLEMAN COUNTY
ELECTRIC COOPERATIVE, INC. FOR
PUBLIC UTILITY COMMISSION
AUTHORITY TO INCREASE RATES
WITHIN COLEMAN, RUNNELS, CONCHO,
TOM GREEN, BROWN, CALLAHAN,
OF
TAYLOR, AND COKE COUNTIES
^
TEXAS
INTERIM ORDER
On May 28, 1980, Coleman County Electric Cooperative, Inc. submitted to the
Commission for approval several revised tariff sheets which had the apparent effect of
adjusting the Co-op's rates to increase revenues to a level previously approved by the
Commission in Docket No. 2293 -.Application of Coleman County Electric Cooperative, Inc.
(F.O. 3/28/79). Following a prehearing conference in this docket held on June 6, 1980,
the Commission Staff determined that the tariff sheets alone would provide an
insufficient basis for the revenue request presented so advised the Co-op that a formal
application should be filed.
On August 19, 1980, the Co-op filed a Petition for Authority to Change Rates and a
Statement of Intent along with eleven copies of its rate filing package. The documents
indicated that the Co-op's proposal is to increase its revenues effective October 1,
1980, by $323,210, a 14.0 percent increase in adjusted gross operating revenues for the
test year.
The Co-op also requested that an interim rate order be issued based on
evidence presented at the June 6 prehearing and substantiated in the rate application
filed on August 19 that the Co-op is facing a severe financial emergency under its current
rates.
The Commission Staff has made a preliminary review of the Co-op's application and
has recommended that interim rates be authorized at a level equal to a total revenue
requirement of $2,577,925, or an increase of $261,955. The interim rate design proposed by the Staff is as follows:
Customer
Charge
Class
Demand
Charge
Energy
Charge
Residential
$5.75/mo.
Sm. Commercial
-
$7.50/mo.
Cotton Gin
-
2.61t
-
$10.00/h.p./yr.
Other Large Power
-
2.35¢
$ 3.00/k.w./mo.
Irrigation
-
0.76t
$ 6.50/h.p./yr.
$4.23/mo.
$7.25/mo.
1.75¢
-
-
Lighting:
175 watt
400 watt
1.76t
In accordance with the recommendations made herein, the Examiner hereby issues the
following Orders:
1.
Finding that the Co-op's financial situation requires immediate rate
relief, the rates proposed herein by the Staff are hereby established as
interim rates for the Co-op pending issuance of a final or superceding
order by the Commission in this docket. These rates may be charged for
service rendered following the date of this order and the revenues
.
.^
Docket No. 3261
INTERIM ORDER
Page 2
collected thereby may be subject to refund to customers in the event the
rates ultimately ordered herein are lower than or different from the
interim rates hereby established.
2.
The Co-op's proposed rates are hereby suspended on the Examiner's own
motion for 120 days beyond the October 1, 1980, effective date in order
to give the Staff adequate time to review the application and make
permanent recommendations concerning it.
This suspension is ordered
pursuant to TEX.REV.CIV.STAT.ANN. art. 1446c, S43(d) (Supp. 1979).
ISSUED AT AUSTIN, TEXAS, on the //&A, day of A^^^,^ , 1980.
PUBLIC UTILITY COMMISSION OF TEXAS
Z`
LNS LLAN
HEARINGS EXAMINER
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n
Y
f'
^
DOCKET NO. 3261
APPLICATION OF COLEMAN COUNTY
ELECTRIC COOPERATIVE, INC. FOR
AUTHORITY TO INCREASE RATES
WITHIN COLEMAN, RUNNELS, CONCHO,
TOM GREEN, BROWN, CALLAHAN,
TAYLOR, AND COKE COUNTIES
PUBLIC UTILITY COMMISSION
OF
TEXAS
NOTICE OF HEARING
On August 19, 1980, Coleman County Electric Cooperative, Inc. filed a Petition for
Authority to Change Rates and a Statement of Intent along with eleven copies of its rate
filing package.
The Coop proposes to increase revenues effective October 1, 1980, by
$323,210, a 14.0 percent increase in adjusted gross operating revenues for the test year.
By Order dated September 11, 1980, the Examiner suspended the Coop's proposed rates for
120 days beyond the stated effective date and set interim rates for the Coop based on the
Staff's finding that immediate rate relief was warranted.
Notice is hereby given that the hearing on the merits of this docket shall be held on
Thursday, October 23, 1980, beginning at 9:30 a.m. at the Commission Offices, 7800 Shoal
Creek Boulevard, Austin, Texas. The written testimony of the Commission Staff shall be
filed by Thursday, October 16, 1980.
ISSUED AT AUSTIN, TEXAS, on the
day of
1980.
PUBLIC UTILITY COMMISSION OF TEXAS
LN^^
LLAN
HEARINGS EXAMINER
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DOCKET NO. 3261
APPLICATION OF COLEMAN COUNTY
ELECTRIC COOPERATIVE, INC. TO
REVISE ITS TARIFF
PUBLIC UTILITY COMMISSION
OF TEXAS
NOTICE OF PREHEARING CONFERENCE
On May 28, 1980, Coleman County Electric Cooperative, Inc. filed with this
Commission six proposed tariff sheets for which Commission approval is requested.
Notice is hereby given that a prehearing conference will be held in this docket
on Wednesday, June 18, 1980, beginning at 3:00 p.m. at the Commission Offices,
7800 Shoal Creek, Austin, Texas. The purpose of the conference, authority for
the scheduling of which is provided in P.U.C. PROC. R. 052.01.00.052, is to
determine what information the Commission Staff will need in order to evaluate
the effect of the proposed tariff revisions and to determine whether a formal
hearing on the merits of the application will be necessary. Consideration will
also be given, if necessary, to other procedural matters within the scope of the
above-cited procedural rule.
ISSUED ON THE
day of
1980.
PUBLIC UTILITY COMMISSION OF TEXAS
CAROLYN S H ELLMAN
HEARINGS EXAMINER
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