Opinion ID: 1668628
Heading Depth: 1
Heading Rank: 2

Heading: gas services

Text: Durbin contends that the gas rates are excessive and arbitrary as to all customers. At trial Durbin presented an expert's testimony on what would have been a fair rate of return for gas services: Year Fair Rate of Return 1974 8.10% 1975 8.56% 1976 7.92% 1977 7.79% 1978 8.25% 1979 8.57% 1980 10.38% A second expert witness for Durbin presented the following calculations of actual rate of return: Year Actual Rate of Return 1974 10.51% 1975 13.95% 1976 73.20% 1977 40.02% 1978 60.86% 1979 28.05% 1980 42.12% The Board presented the following evidence on the actual rate of return for the system as a whole: Year Rate of Return 1974 5.30% 1975 3.54% 1976 6.51% 1977 4.39% 1978 4.49% 1979 2.18% 1980 4.02% No evidence was offered by the Board on rate of return on gas services alone. As we have stated, a consolidated utility system may establish rates which, in effect, allow one component of the system to subsidize another component, where the overall rate structure is reasonable. Nonetheless, the profit on any one system may not unduly burden the customers with rates which are unreasonable in order to offer lower rates for other services. In the case before us, we find that the Board failed to present any evidence as to the reasonableness of the rate of return on gas services. Therefore, we hold that it was error for the trial court to find that the profits from that service [gas] are not so great as to be unlawful. This portion of the trial court's order is due to be reversed.