Opinion ID: 1720472
Heading Depth: 1
Heading Rank: 3

Heading: Material and Supplies as Working Capital

Text: The company contends that the cities erred in treating materials and supplies as a part of working capital and in offsetting them by tax accruals. As has already been discussed above, however, investors in a utility are entitled to a return only on those funds supplied by them, and to the extent that the funds have in effect been supplied by the ratepayers no return thereon should be allowed. This reasoning was followed by the Iowa Supreme Court in upholding the offset of tax accruals against materials and supplies in the Davenport Water Co. case, supra, and we cannot say that the cities acted arbitrarily, capriciously or unreasonably in following that approach in the instant case. See also Pacific Telephone & Tel. Co. v. Public Utilities Com'n, supra; and City of Cincinnati v. Public Utilities Com'n, supra.