Opinion ID: 1923168
Heading Depth: 1
Heading Rank: 3

Heading: arbitrary and capricious action issue

Text: District court erred in affirming the following rulings made by Commission which were arbitrary and capricious or otherwise illegal under § 490A.17 of the Iowa Code, because 1. Commission erroneously understated Utility's rate base in these particulars: (a) By denying an appropriate addition to the rate base for the non-income-producing portion of Utility's committed construction program at end of the test year; (b) By excluding from the rate base any allowance for materials and supplies. 2. Commission erroneously overstated the amount of operating income which Utility would receive from rates approved by Commission in the following particulars: (a) By refusing to consider any deduction therefrom for Utility's charitable donations and contributions; (b) By understating the amount of Utility's property taxes to be deducted therefrom through demonstrable error in calculation; (c) By understating Utility's rate case expense to be deducted therefrom by calculating a federal income tax saving resulting from such expense at a higher rate than that found applicable to Utility by Commission; (d) By understating Utility's federal income tax to be deducted therefrom by including as deductible in the computation of said tax the depreciation on property excluded by Commission from the rate base.