Opinion ID: 1525205
Heading Depth: 1
Heading Rank: 6

Heading: Final Revenue Requirement [15]

Text: The City complains generally about the revenue requirement determination and then makes specific contentions concerning particular components of the revenue requirement. The City argues that the final revenue requirement of the Commission was based solely on the non-binding stipulation agreement and not on the record evidence. According to the city, the findings and conclusions adopted by the Commission do not allow this Court to analyze the decision because the agreement between the parties is not evidence and not a statutory standard for review. We disagree. Finding of Fact No. 152 provides: The preponderance of the evidence establishes that the company has a total revenue requirement with components as set forth in Exhibit B of the Amended and Restated Stipulation. Docket No. 7460, supra note 1, at 1260. This finding is supported by twenty-five underlying findings of fact addressing the components of the total revenue requirement, with each finding supported by record evidence. Id. at 1260-1265 (Findings of Fact 153-87). Except for the specific challenges to three of the components making up the total revenue requirement, the City does not complain specifically that any particular underlying finding supporting Finding of Fact No. 152 is not supported by substantial evidence. We presume that the Commission's decision is supported by substantial evidence. Charter Medical, 665 S.W.2d at 453. In addition, we reject the City's argument that the Commission applied no statutory standard in determining revenue requirements. As the City recognizes, the statutory standard that controls revenue requirement determinations is that rates be fixed to permit the utility a reasonable opportunity to earn a reasonable return on its invested capital plus reasonable and necessary operating expense to provide service. Tex.Rev.Civ.Stat.Ann. art. 1446c, § 39(a). The Commission's determination of the revenue requirement is supported by findings which detail the Commission's resolution of contested issues regarding the Company's reasonable and necessary operating expenses. Thus, the statutory standard for determining the revenue requirement was met. The City makes numerous challenges to three components of the final revenue requirement, including (1) Operating and Maintenance expenses; (2) Employee Benefits; and (3) Taxes other than Federal Income Taxes. After reviewing the opinion of the court of appeals, the briefs of the parties, and the record, we conclude that the City's arguments on these issues are without merit. The court of appeals correctly articulates the error in the City's claims. 839 S.W.2d at 927-31.