Opinion ID: 1194147
Heading Depth: 1
Heading Rank: 6

Heading: Including as Operating Expense Such Things as Service Award Banquets, Livestock Purchased at State Fairs, Floral Expenses, and Rental Space at State Fairs.

Text: Mr. Wimpey characterized these expenditures as a necessary part of doing business and that Oklahoma Natural, as any other business, was required to support the civic activities of the communities in which it operates. Particularly in view of the relatively modest amounts spent on these items, we hold there was sufficient substantial evidence (which was undisputed) to support the findings of the Commission. The Attorney General next urges that the Commission, in arriving at Oklahoma Natural's total adjusted operating revenues for the test year, assumed total operating revenues of the utility for the test year were $601,198,242, without said figure being supported by evidentiary facts. Suffice it to say that the figure appeared as a part of Exhibit 22 which was sponsored by Oklahoma Natural's witness, Wimpey, and submitted to the Commission. The Commission staff reviewed and audited Oklahoma Natural's financial records including the $601,198,242 figure, the results of which review and audit were submitted to the Commission without objection. The Attorney General challenges the figure used by all of the parties before the Commission for the first time on appeal to this court. In the case of Mann v. Welch, [13] we held (Syllabus 2 by the court): Where evidence of a fact which is capable of proof was not produced in the trial of a cause, in which such fact was a material element of the right of the plaintiff to the recovery obtained, because the same was tacitly conceded, and the cause was tried on the theory that if plaintiff established facts warranting a recovery, the amount of the recovery should be the amount prayed, the defendant cannot raise the failure to produce such proof as ground for reversal for the first time in this court. The principle followed in Mann, supra, applies here. In the proceedings before the Commission, it was tacitly assumed by all of the parties that the figure $601,198,242 represented Oklahoma Natural's total utility operating revenues during the test year. No objection that it was not factually supported was raised before the Commission. The Attorney General who participated in the proceedings before the Commission may not now raise the issue on appeal or for judicial review by this court. The Attorney General urges that the spread or design of the rate increase as approved by the order of the Commission is grossly discriminatory against the residential ratepayer when compared with its application to other classifications of gas users. In Tecumseh Gas Systems, Inc. v. State , [14] we quoted with approval from Application of Oklahoma Natural Gas Co., Okl., 406 P.2d 273, as follows: The rate base method of setting rates, stated in an overly simplified manner, is substantially as follows: 1. Determination of an amount called the rate base, upon which the Company should be permitted to make a profit. This amount is based upon actual appraisals of the Company properties, and no consideration is given to the number of shares of stock outstanding, or to the value thereof. 2. Determination of a percentage rate of return (6.25% in this case) to apply to the rate base to determine the amount, in dollars, to be allowed to the Company as profit or net income. 3. Determination of the Company's expected expenses in the conduct of the business, including such things as operating expenses, depreciation, taxes, etc. 4. Determination of rate schedules sufficient to repay to the Company its expenses in the conduct of the business, plus an amount, as profit, as determined in (2) above. In Arkansas La. Gas Co. v. Sun Oil Co. of Pa., [15] we said: [N]ot all discrimination between customers is unlawful with the prohibition applying only to those differences in treatment which are unjust or unreasonable. See also Fretz v. City of Edmond, 66 Okl. 262, 168 P. 800 (1917). ..... There is no precise statutory or court announced basis for determining the justness or reasonableness of class rate level structures or relationships the court generally holding that rate making is the responsibility of a regulatory commission effectively exercising its discretion upon sufficient evidence before it. Re Lincoln Service Corp., 1 PUR 4th, 511, Wyoming Public Service Commission (1973). It is universally recognized that the fixing of rate schedules for public utilities is a legislative process, and that a public service regulatory body acts in a legislative capacity in approving rate schedules. Wiley v. Oklahoma Natural Gas Company, Okl., 429 P.2d 957 (1967). In Wiley, supra, we said by the Amendments in 1941 to Article 9 of our Constitution, this Court's power to review legislatively the rate order of the Commission was quite specifically cancelled.    our review shall be judicial only, and shall not extend further than to determine whether the Commission has regularly pursued its authority, and whether the findings and conclusions of the Commission are sustained by the law and substantial evidence.